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JAMB Commerce 2002 Question 23

Question 23

Business Finance

Debentures differ from shares in that

  1. A.they are secured on the company's assets
  2. B.ownership is open to the public
  3. C.they form part of the capital of the business
  4. D.rewards are usually paid out of profits.
Show the answer and explanation

Answer: A (they are secured on the company's assets)

Explanation

Debentures are loans usually secured on the company's assets; shares are ownership capital.