Accountancy Quiz: Issue and Redemption of Debentures
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Preview questions
1. What is a debenture?
A type of equity share · A long-term debt instrument · A short-term loan · A type of bond with no interest
2. Which of the following is NOT a characteristic of debentures?
Fixed interest rate · Secured against assets · Participates in profits · Redeemable after a fixed period
3. What is the primary purpose of issuing debentures?
To raise equity capital · To raise long-term funds · To distribute dividends · To reduce liabilities
4. What is meant by 'redemption of debentures'?
Issuing new debentures · Paying back the principal amount to debenture holders · Converting debentures into shares · Increasing the interest rate
5. Which of the following methods can be used for the redemption of debentures?
By issuing new debentures · By buying back debentures · By converting into equity shares · All of the above
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