Question

On Bearer debentures, Interest is paid to a person who produces the ................... attached to such debentures?

• A. Registered Deed
• B. Ownership Papers
• C. Interest Coupon
• D. Interest Certificate

Hint:

Bearer debentures carry coupons. Interest is paid against the coupon.

Answer 1

The Correct Option is C

Step 1: Think about the problem:
Nobody records the name of the owner of a bearer debenture. The company still has to pay interest to the right person. It needs a simple proof of claim.

Step 2: The solution used in practice:
The company prints coupons on the debenture. Each coupon stands for one interest payment. The person who hands over the coupon gets the interest for that period.

Step 3: Match with the options:
Registered deed and ownership papers do not fit a bearer instrument. An interest certificate is a tax paper. Only the coupon fits.

Final Answer:
Option (3). \[ \boxed{\text{Interest Coupon}} \]