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Issue & Redemption of Debentures - Introduction Video Lecture | Advanced Corporate Accounting - B Com

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FAQs on Issue & Redemption of Debentures - Introduction Video Lecture - Advanced Corporate Accounting - B Com

1. What is the difference between issue and redemption of debentures?
Ans. Issue of debentures refers to the process of raising funds by a company through the sale of debentures to investors, while redemption of debentures means repaying the principal amount to the debenture holders on the maturity date.
2. What are the types of debentures that can be issued by a company?
Ans. Companies can issue different types of debentures such as convertible debentures, non-convertible debentures, secured debentures, unsecured debentures, redeemable debentures, and irredeemable debentures.
3. How does the issue of debentures impact a company's capital structure?
Ans. The issue of debentures increases the long-term debt component of a company's capital structure, which can affect its financial leverage, solvency, and overall risk profile.
4. What are the legal requirements for the issue and redemption of debentures?
Ans. Companies need to comply with the provisions of the Companies Act, 2013, regarding the issue and redemption of debentures. This includes obtaining necessary approvals, filing necessary documents with the Registrar of Companies, and following specific procedures.
5. How do investors benefit from investing in debentures issued by a company?
Ans. Investors benefit from investing in debentures as they receive a fixed rate of interest on their investment, have a priority claim on the company's assets in case of liquidation, and can potentially benefit from capital appreciation if they hold convertible debentures.
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