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Question : When a Company takes a loan from a Bank or from some other party, the Company may have to issue debentures as a subsidiary or secondary security in addition to the principal security known as --------

Option 1: For cash consideration 

Option 2: For other then cash consideration 

Option 3: Collateral securities 

Option 4: None of the above 


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 14th Jan, 2024

Correct Answer: Collateral securities 


Solution : Answer = Collateral securities.

Collateral securities are additional assets pledged by a borrower to secure a loan. When a company takes a loan and offers debentures as secondary security, these debentures serve as collateral securities. They provide an extra layer of assurance to the lender in case the primary security is insufficient to cover the loan.
Hence, the correct option is 3.

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