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Question

are loans that companies borrow from the general public.

A
Shares
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B
Debentures
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C
Term loan
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D
Bank Loan
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Solution

The correct option is B Debentures
Debentures are loans that companies borrow from the general public. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital.

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