Question

The lender is entitled to only on the amount of loan, but not on the debentures issued as collateral security.

• A. interest
• B. dividend
• C. shares
• D. debentures

Answer 1

The correct option is A interest

The lender is entitled to interest only on the amount of loan, but not on the debentures issued as collateral security. In a case where the company is unable to repay the principal amount and the interest on the loan on the due date, the lender becomes the holder of these debentures. Thus, he can exercise all the rights of a debenture holder.