Question

The Debentures that are payable on the expiry of the specific period either in lumpsum or in instalments during life time of the company are called:

• A. Secured Debentures
• B. Redeemable Debentures
• C. Perpetual Debentures
• D. Specific Coupon Rate Debentures

Hint:

Redeemable Debentures have fixed maturity and repayment terms, unlike perpetual debentures.

Answer 1

The Correct Option is B

Step 1: Categorize Debentures
Redeemable Debentures: Repaid at a fixed end date or through installments during the company's operation.
Perpetual Debentures: Lack a maturity date and are not subject to repayment.
Secured Debentures: Collateralized by assets; can be either redeemable or perpetual.
Specific Coupon Rate Debentures: Pertains solely to the interest rate, independent of repayment terms.
Step 2: Determination
Consequently, debentures requiring payment after a defined period or in installments are classified as Redeemable Debentures.