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Which of the following is/are true with respect to debentures?
- a)They can be issued for cash
- b)They can be issued for consideration other than cash
- c)They cannot be issued as collateral security
- d)Both (a) and (b) above
Correct answer is option 'D'. Can you explain this answer?
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Which of the following is/are true with respect to debentures?a)They c...
Debentures
A: They can be issued for cash
- Debentures can definitely be issued in exchange for cash. This is a common method used by companies to raise funds for various purposes.
B: They can be issued for consideration other than cash
- Debentures can also be issued in exchange for consideration other than cash. This means that a company can issue debentures in exchange for assets, services, or any other form of consideration agreed upon by the parties involved.
C: They cannot be issued as collateral security
- This statement is false. Debentures can be issued as collateral security. In fact, many companies issue secured debentures where they provide some form of collateral, such as assets or property, to secure the debt and provide additional security to the debenture holders.
D: Both (a) and (b) above
- This statement is true. Both statement A and statement B are correct. Debentures can be issued for cash as well as for consideration other than cash.
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Debentures are long-term debt instruments issued by companies or governments to raise capital. They are essentially a type of loan that investors provide to the issuer in exchange for regular interest payments and the return of the principal amount at maturity. Here are the details on the statements mentioned:
A: They can be issued for cash
- Debentures can definitely be issued in exchange for cash. This is a common method used by companies to raise funds for various purposes.
B: They can be issued for consideration other than cash
- Debentures can also be issued in exchange for consideration other than cash. This means that a company can issue debentures in exchange for assets, services, or any other form of consideration agreed upon by the parties involved.
C: They cannot be issued as collateral security
- This statement is false. Debentures can be issued as collateral security. In fact, many companies issue secured debentures where they provide some form of collateral, such as assets or property, to secure the debt and provide additional security to the debenture holders.
D: Both (a) and (b) above
- This statement is true. Both statement A and statement B are correct. Debentures can be issued for cash as well as for consideration other than cash.
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Which of the following is/are true with respect to debentures?a)They can be issued for cashb)They can be issued for consideration other than cashc)They cannot be issued as collateral securityd)Both (a) and (b) aboveCorrect answer is option 'D'. Can you explain this answer?
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