Which of the following sources of capital should not be selected by a business if its fixed cost is high?

(a) Preference shares

(b) All of the above

(c) Debentures

(d) Equity shares

Answer (c) Debentures

Explanation: Debentures are a debt instrument utilised by organisations and governments to give credit. Debentures are otherwise called a bond that fills in as an IOU among purchasers and issuers. Organisations use debentures when they need to borrow cash at a fixed rate of interest for their development.

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