Commerce Exam > Commerce Questions > Directions : In the following questions, a s...
Start Learning for Free
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?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
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.
View all questions of this test
Most Upvoted Answer
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.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
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?
Question Description
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.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of 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? defined & explained in the simplest way possible. Besides giving the explanation of
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?, a detailed solution 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? has been provided alongside types of 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? theory, EduRev gives you an
ample number of questions to practice 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? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup