Identify the methods of Redemption of Debenture from the following.(A) By conversion into shares or new debenture(B) Purchase in open market(C) Sinking fund(D) Payment in instalments(E) Payment in lump-sumChoose the correct answer from the options given below :
- A(A), (B) and (C) only
- B(A), (B), (C) and (D) only
- C(A), (B), (D) and (E) only
- D(C), (D) and (E) only
Solution & Step-by-step Explanation
The standard methods of redemption of debentures are:(A) Conversion into shares or new debentures.(B) Purchase of own debentures in the open market.(D) Payment in instalments (Draw of lots).(E) Payment in a lump-sum at maturity.Sinking fund (C) is a source or technique for providing funds to facilitate redemption, not an actual method of discharging the liability. Thus, A, B, D, and E are the methods.