The following are the features of a Debenture:(A) Debentures can be converted into shares if the terms of issue are so provided, and in that case these are known as convertible debentures.(B) Debentures are generally secured and carry a fixed or floating charge over the assets of the company.(C) The rate of interest on debentures may vary from year to year depending upon the profits of the company.(D) The debentures are issued for a specified period and repayable on the expiry of that period.Choose the correct answer from the options given below:
- A(A), (B) and (C) only
- B(A), (B) and (D) only
- C(A), (B), (C) and (D)
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
Statements A, B, and D are standard correct characteristics of debentures. Statement C is incorrect because debentures carry a fixed rate of interest that must be paid regardless of whether the company makes a profit or loss (as it is a charge against profit, unlike equity dividends). Thus, the correct option is (A), (B) and (D) only.