There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion (A): Debenture holders are the creditors of the company carrying a fixed rate of interest.
Reason (R): Debentures are short-term loan taken from the public.
Answer & explanation
Correct answer: option 3
If a company requires funds for extension and development purpose, it can borrow from the public by issuing debentures for a fixed period of time and at a fixed rate of interest. Debentures are generally long term instrument.