Question

State True/False with reasons:
Dividend warrants are used to pay interest to the debenture holders.

• A. True
• B. False

Answer 1

The correct option is B False

(i) Dividend warrant is a cheque issued by the company to the registered shareholders.
(ii) It is an order by the company to the banker to pay a specific amount mentioned on the dividend warrant to the person specified on that warrant.
(iii) Debenture holders get interest and not dividend on the debenture investment because they are the creditors of the company.
(iv) Interest is paid periodically through interest warrants by the company.
(v) Thus interest Warrants are used, to pay interest to the debentures holders.