Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

Debenture holders receive............ at a............. percentage from the company.

Options:

Dividend, fixed

Dividend, fluctuating

Interest, fixed

Interest, Fluctuating

Correct Answer:

Interest, fixed

Explanation:

The correct answer is option 3- Interest, fixed.

Debenture is the acknowledgements of debt. It is a loan capital raised by the company from general public. A person/holder of such a written acknowledgement is called ‘debenture holder’. Debenture holders receive interest at a fixed percentage.

* Shareholders receive dividend and debenture holders receive interest.