Which of the following is true about debentures-(A) Debenture is a part of owned capital.(B) The payment of interest on debentures is a charge on the profits of the company.(C) The debentures cannot be issued at a discount of more than of the face value.(D) Redeemable debentures are those debentures which are payable on the expiry of the specific period.Choose the correct answer from the options given below:
- A\text{(A) and (D) only}
- B\text{(B) and (C) only}
- C\text{(C) and (D) only}
- D\text{(B) and (D) only}
Solution & Step-by-step Explanation
Let's evaluate each statement individually:(A) False: Debentures are part of borrowed capital (debt), not owned capital (equity).(B) True: Interest on debentures must be paid regardless of profit or loss, making it a charge against profit.(C) False: Unlike shares, there is no specific structural legal limit on the maximum discount percentage for issuing debentures under the Companies Act, 2013.(D) True: Redeemable debentures carry a definitive maturity timeline upon which the principal is repaid.Since statements (B) and (D) are correct, Option 4 is the right fit.