Question : Which of the following statements is false?
Option 1: Debenture is debt of the company. Therefore, a debenture holder is a lender.
Option 2: Debenture holder gets interest at the stated rate whether the company earns profit or not.
Option 3: Debentures cannot be issued at discount.
Option 4: Debentures can be converted into shares.
Correct Answer: Debentures cannot be issued at discount.
Solution : Answer = Debentures cannot be issued at a discount.
In reality, debentures can be issued at a discount under certain circumstances, such as when market conditions require it or as part of a financial restructuring plan. This allows companies to raise funds at lower effective interest rates.
Hence, the correct option is 3.