Question : Debenture holders have first right in the event of a company's liquidation for:
Option 1: Interest Amount
Option 2: Principal Amount
Option 3: Both (a) and (b)
Option 4: None of the above
Correct Answer: Both (a) and (b)
Solution : If a Company gets liquidated then the debenture holder gets priority as compared to other Shareholder. Shareholders are entitled to receive dividends, which is a share in the profits of the company. Since they have lent money to the company, debenture holders are entitled to receive interest. Despite generating profits, a company may choose not to pay dividends to its shareholders.
Hence the correct answer is Option 3
Question : Debenture holders are entitled the right to receive
Option 1: Interest
Option 2: Dividend
Option 3: Both 1 & 2
Question : Which is an agreement between the company and the trustees to look after the interest of debenture holders?
Option 1: Debenture Trust Deed
Option 2: Partnership Deed
Question : Which of the following statements is false?
Option 1: A Company Can issue Convertible debenture
Option 2: Debenture can not be secured
Option 3: Company can issue redeemable debenture
Option 4: Debenture have no right to participate in profit over and above their fixed interest
Question : Secured debenture is known as
Option 1: Mortagage debenture
Option 2: Naked debenture
Option 3: Unsecured debenture
Question : Which of the following are the features and characteristics of debentures?
Option 1:
Debenture is a written document or certificate acknowledging debt by the company.
Option 2: Mode and period of repayment of principal and interest is fixed., it is borrowing of the company.
Option 3: Rate of interest on the debenture is specified. It is a practice to prefix 'Debentures' with the rate of interest. For example, if the rate of interest is 9%, the title of the debentures will be '9% Debentures'.
Option 4: All of the above
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