Question 14
Business FinanceWhich of the following statements is true of a debenture?
- A.Its holders receive interest
- B.It forms part of company's authorized capital
- C.Its holders are co-owners of the company
- D.Its holders control the company
Show the answer and explanation
Answer: A (Its holders receive interest)
Explanation
A debenture is a loan to the company, so its holders are creditors who receive fixed interest, not owners.