Debenture represents _____ of the company.

Deposit

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Overdraft

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Loan

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None of the above

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Solution

The correct option is B Loan
Business can take the amount from outsiders in two ways i.e. equity and debt. Debenture is a type of debt instrument that is not secured by any physical assets. It is as good as debt of the company which carries a certain percentage of interest. It is a borrowing that the company receives by issuing debentures for cash or any other consideration.

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Similar questions

A ‘share’ represents ownership of the company whereas a debenture is only acknowledgement of debt. State true or false.

Debentures represent

(a) Fixed capital of the company

(b) Permanent capital of the company

(d) Loan capital of the company

Debentures of a company can be issued :

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