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Question : Case Study: LMN Ventures - Financing Innovation and Research

LMN Ventures is a research-driven technology company aiming to innovate and develop cutting-edge products. The company is exploring various sources of business finance to support its research and development endeavors.

Question:Different Sources of Finance

What distinguishes debentures from equity shares in terms of ownership and returns?

Option 1: Debentures provide ownership rights
 

Option 2: Debentures pay fixed dividends
  

Option 3: Equity shares have fixed interest rates

 

Option 4: Equity shares represent short-term borrowing


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Debentures pay fixed dividends
  


Solution : The correct answer is (b) Debentures pay fixed interest

This statement is correct. Debentures pay fixed interest to debenture holders, not dividends. The interest rate is predetermined and agreed upon at the time of issuing the debentures.

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