Question : Debentures are:
Option 1: Issued by government authorities
Option 2: Always secured by assets of the company
Option 3: Long-term debt instruments
Option 4: None of the above
Answer (1)
19th Jan, 2024
Correct Answer: Long-term debt instruments
Solution : The correct answer is (c) Long-term debt instruments
Debentures are long-term debt instruments issued by companies or corporations to borrow funds from investors. They represent a loan agreement between the issuing company and the debenture holders. The debenture holders lend money to the company and, in return, receive fixed interest payments at a predetermined rate and a specified maturity date for the repayment of the principal amount.
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