The following are the features of Debentures:(A) The payment of interest is a charge on profits and is to be paid even if there is no profit.(B) The debentures, which are issued for a specified period are repayable on the expiry of that period.(C) If the debentures are generally secured, they carry a fixed or floating charge over the assets of the company.(D) Debentures can not be converted into shares in any case.Choose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (B) and (C) only
- C(A), (B), (C) and (D)
- D(B), (C) and (D) only
Solution & Step-by-step Explanation
Evaluating the core characteristics of debentures:(A) is True: Debenture interest is a charge against profits and must be paid irrespective of the company's profitability.(B) is True: Redeemable debentures are issued for a specific timeframe and repaid upon its maturity.(C) is True: Secured debentures create a security charge (fixed or floating) on the company's assets.(D) is False: Convertible debentures exist and can be legally converted into equity shares or new debentures after a specified period.Therefore, statements (A), (B), and (C) are true.