Podcast
Questions and Answers
Why are debentures considered an important instrument for raising long term debt capital?
Why are debentures considered an important instrument for raising long term debt capital?
- Debentures bear a fixed rate of interest and promise repayment at a future date (correct)
- Debenture holders have voting rights in the company
- Debentures offer a share in the company's ownership
- Debentures provide tax benefits for the company
What is a major limitation of preference shares as a source of business finance?
What is a major limitation of preference shares as a source of business finance?
- Preference shares are not suitable for investors seeking higher returns (correct)
- Preference shares dilute the claims of debt holders over company assets
- Dividend on preference shares is tax deductible
- Dividend on preference shares is assured regardless of the company's profit
How often are debenture holders usually paid the fixed stated amount of interest?
How often are debenture holders usually paid the fixed stated amount of interest?
- Quarterly
- Annually
- Monthly
- Six-monthly (correct)
What term is used to refer to the fact that a company has borrowed a certain amount of money and promises to repay it at a future date?
What term is used to refer to the fact that a company has borrowed a certain amount of money and promises to repay it at a future date?
What aspects are considered by a credit rating agency like CRISIL when rating the public issue of debentures?
What aspects are considered by a credit rating agency like CRISIL when rating the public issue of debentures?
What is the return to the investor for Zero Interest Debentures (ZID)?
What is the return to the investor for Zero Interest Debentures (ZID)?
What is a key advantage of financing through debentures in relation to equity shareholders' control on management?
What is a key advantage of financing through debentures in relation to equity shareholders' control on management?
What makes cumulative preference shares different from zero interest debentures (ZID)?
What makes cumulative preference shares different from zero interest debentures (ZID)?
What is the main difference between secured and unsecured debentures?
What is the main difference between secured and unsecured debentures?
What distinguishes registered debentures from bearer debentures?
What distinguishes registered debentures from bearer debentures?
What sets convertible debentures apart from non-convertible debentures?
What sets convertible debentures apart from non-convertible debentures?
How do bearer debentures differ from registered debentures in terms of transferability?
How do bearer debentures differ from registered debentures in terms of transferability?
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