Question

Global depository receipts are a form of

• A. Debenture
• B. Bonds
• C. Equity shares
• D. None of these

Hint:

A GDR is issued against shares held by a depository bank, so think ownership, not debt.

Answer 1

The Correct Option is C

This question checks what a Global Depository Receipt (GDR) actually stands for.

1. Debenture: A debenture is a debt instrument, the company owes the holder money and pays interest on it. A GDR holder does not lend money to the company in this way, so this option is wrong.
2. Bonds: Bonds work the same way as debentures, as a loan that earns fixed interest, again not what a GDR represents.
3. Equity shares: A GDR is issued against a block of the company's own shares held with an overseas depository bank, so each receipt stands for real ownership in the company. This is the correct answer.
4. None of these: Wrong, since equity shares is the right match.

The core idea is that a GDR is simply a way to let foreign investors hold a company's shares indirectly, through a bank backed certificate, rather than lend it money.

Let's summarize:

• Debentures and bonds are debt, they do not give ownership.
• A GDR is backed by actual equity shares held with a depository bank.

So the correct answer is equity shares.