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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.
Reason (R): Debenture holders have voting rights.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'C'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
Issue of debenture does not result in dilution of interest of equity shareholders as they do not have the right either to vote or to take part in the management of the company.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.
Reason (R): Debenture holders have voting rights.
The correct answer is option 'C' - Assertion (A) is true, but Reason (R) is false.
Explanation:
Debentures and Dilution of Equity Shareholders' Interest:
- Debentures are long-term debt instruments issued by companies to raise funds from the public.
- When a company issues debentures, it does not result in the dilution of interest of equity shareholders.
- The reason for this is that debentures represent a loan taken by the company and not ownership in the company.
- Equity shareholders hold ownership in the company and their interest is represented by their shareholding in the company.
- The issue of debentures does not affect the ownership or shareholding of equity shareholders.
Voting Rights of Debenture Holders:
- Debenture holders do not have voting rights in a company.
- Voting rights are generally associated with equity shareholders who are the owners of the company.
- Debenture holders are lenders to the company and their rights are limited to receiving interest and principal payments as per the terms of the debenture agreement.
- They do not participate in the decision-making process of the company, including voting on corporate matters.
Conclusion:
- The assertion (A) is true because the issue of debentures does not result in the dilution of interest of equity shareholders.
- However, the reason (R) is false because debenture holders do not have voting rights.
- Therefore, option 'C' is the correct answer as it states that Assertion (A) is true, but Reason (R) is false.
Reason (R): Debenture holders have voting rights.
The correct answer is option 'C' - Assertion (A) is true, but Reason (R) is false.
Explanation:
Debentures and Dilution of Equity Shareholders' Interest:
- Debentures are long-term debt instruments issued by companies to raise funds from the public.
- When a company issues debentures, it does not result in the dilution of interest of equity shareholders.
- The reason for this is that debentures represent a loan taken by the company and not ownership in the company.
- Equity shareholders hold ownership in the company and their interest is represented by their shareholding in the company.
- The issue of debentures does not affect the ownership or shareholding of equity shareholders.
Voting Rights of Debenture Holders:
- Debenture holders do not have voting rights in a company.
- Voting rights are generally associated with equity shareholders who are the owners of the company.
- Debenture holders are lenders to the company and their rights are limited to receiving interest and principal payments as per the terms of the debenture agreement.
- They do not participate in the decision-making process of the company, including voting on corporate matters.
Conclusion:
- The assertion (A) is true because the issue of debentures does not result in the dilution of interest of equity shareholders.
- However, the reason (R) is false because debenture holders do not have voting rights.
- Therefore, option 'C' is the correct answer as it states that Assertion (A) is true, but Reason (R) is false.
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.Reason (R): Debenture holders have voting rights.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct 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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