Question : Which of the following statements is true?
Option 1: A debenture issue at discount can be redeemed at premium
Option 2: A debenture holder is an owner of the company
Option 3: A debenture holder can get his money back only on the liquidation of the company
Option 4: A debenture holder receives interest only in the event of profit
Correct Answer: A debenture issue at discount can be redeemed at premium
Solution : Debentures are referred to as being issued at a discount and redeemable at a premium when they are issued below their par value (or face value) but are redeemed at a price higher than their par value. Loss on issue of debenture is considered as the difference between the issue price and redemption price.
Hence the correct answer is option 1.