Question

Which of the following are the debentures from the point of tenure?
a. Unsecured debenture.
b. Redeemable debenture.
c. Irredeemable debenture.
d. Secured debenture

• A. Both (a) and (b)
• B. Both (b) and (c)
• C. Both (c) and (d)
• D. Both (a) and (d)

Answer 1

The correct option is B Both (b) and (c)

A company may issue different kinds of debentures which can be classified as:
1. From the point of view of security,
2. From the point of view of tenure,
3. From the point of view of convertibility,
4. From coupon rate point of view etc.

From the point of view of tenure, there are two types of debenture i.e. Redeemable debentures: Redeemable debentures are those which are payable in the expiry of the specific period either in lumpsum or in instalments during the lifetime of the company.

Irredeemable debentures: Irredeemable debentures are also known as perpetual debentures because the company does not give any undertaking for the repayment of money borrowed by issuing such debentures.