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Which of the following statement is false with respect to debentures?
- a)A company can issue irredeemable debentures
- b)A company can issue debentures for consideration other than cash
- c)A company can issue debentures with voting rights
- d)A company can busy its own debentures
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Which of the following statement is false with respect to debentures?a...
False Statement: A company can issue debentures with voting rights
Explanation:
Debentures are long-term debt instruments issued by a company to raise funds from the public. They are essentially a type of loan taken by a company from investors or lenders. Debentures are characterized by certain features, as explained below:
1. Irredeemable Debentures: A company can issue debentures that have no maturity date or are irredeemable. This means that the company does not have an obligation to repay the principal amount to the debenture holders. However, the company is still required to pay interest on these debentures. Therefore, statement (a) is true.
2. Consideration Other than Cash: A company can issue debentures in exchange for consideration other than cash. This means that the company can issue debentures in exchange for assets, such as land, buildings, or machinery. This allows the company to diversify its sources of funding. Therefore, statement (b) is true.
3. Debentures with Voting Rights: Unlike shares, debentures do not carry voting rights. Debenture holders are not entitled to vote in the company's general meetings or participate in the decision-making process. Debenture holders are primarily creditors of the company and have a right to receive interest and principal repayments as per the terms of the debenture agreement. Therefore, statement (c) is false.
4. Buyback of Debentures: A company has the option to buy back its own debentures from the market. This can be done either through an open market purchase or by making a tender offer to the debenture holders. The company may choose to buy back its debentures to reduce its debt burden or due to favorable market conditions. Therefore, statement (d) is true.
In conclusion, the false statement with respect to debentures is option (c) - a company cannot issue debentures with voting rights.
Explanation:
Debentures are long-term debt instruments issued by a company to raise funds from the public. They are essentially a type of loan taken by a company from investors or lenders. Debentures are characterized by certain features, as explained below:
1. Irredeemable Debentures: A company can issue debentures that have no maturity date or are irredeemable. This means that the company does not have an obligation to repay the principal amount to the debenture holders. However, the company is still required to pay interest on these debentures. Therefore, statement (a) is true.
2. Consideration Other than Cash: A company can issue debentures in exchange for consideration other than cash. This means that the company can issue debentures in exchange for assets, such as land, buildings, or machinery. This allows the company to diversify its sources of funding. Therefore, statement (b) is true.
3. Debentures with Voting Rights: Unlike shares, debentures do not carry voting rights. Debenture holders are not entitled to vote in the company's general meetings or participate in the decision-making process. Debenture holders are primarily creditors of the company and have a right to receive interest and principal repayments as per the terms of the debenture agreement. Therefore, statement (c) is false.
4. Buyback of Debentures: A company has the option to buy back its own debentures from the market. This can be done either through an open market purchase or by making a tender offer to the debenture holders. The company may choose to buy back its debentures to reduce its debt burden or due to favorable market conditions. Therefore, statement (d) is true.
In conclusion, the false statement with respect to debentures is option (c) - a company cannot issue debentures with voting rights.
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Which of the following statement is false with respect to debentures?a...
Option c is correct
because debenture holder are the creditor of the company so company can't able to give them voting right.Hence a company can not issue debenture having voting rights
because debenture holder are the creditor of the company so company can't able to give them voting right.Hence a company can not issue debenture having voting rights
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Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer?
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Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer?.
Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of the following statement is false with respect to debentures?a)A company can issue irredeemable debenturesb)A company can issue debentures for consideration other than cashc)A company can issue debentures with voting rightsd)A company can busy its own debenturesCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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