CA Foundation Exam > CA Foundation Questions > Which of the following is false?a)A company c...
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Which of the following is false?
- a)A company can issue redeemable debentures
- b)A company can issue debentures with voting rights
- c)A company can buy its own shares
- d)A company can buy its own debentures
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Which of the following is false?a)A company can issue redeemable deben...
Statement A:
- A company can issue redeemable debentures.
- This statement is true. A debenture is a type of debt instrument that a company can issue to raise capital. Redeemable debentures are those that can be repaid by the company at a predetermined date or at the request of the debenture holder.
Statement B:
- A company can issue debentures with voting rights.
- This statement is false. Debentures are typically issued as a form of borrowing and do not carry voting rights. Voting rights are usually associated with shares of a company's stock.
Statement C:
- A company can buy its own shares.
- This statement is true. A company can repurchase its own shares from the market, which is known as share buyback. This can be done for various reasons, such as returning capital to shareholders or reducing the number of outstanding shares.
Statement D:
- A company can buy its own debentures.
- This statement is true. A company can buy back its own debentures from the market if it wishes to reduce its debt or retire the debentures early. This is similar to a share buyback but applies to debt instruments instead.
Therefore, the false statement is B: A company can issue debentures with voting rights.
Most Upvoted Answer
Which of the following is false?a)A company can issue redeemable deben...
Option b is false because debenture holders don't get voting rights
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Which of the following is false?a)A company can issue redeemable debenturesb)A company can issue debentures with voting rightsc)A company can buy its own sharesd)A company can buy its own debenturesCorrect answer is option 'B'. Can you explain this answer?
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