Home › CBSE Class 12 (Commerce) › Accountancy › Accounting for Companies: Debentures › Why may a lender ask for debentures as collatera…
Why may a lender ask for debentures as collateral security?
ATo recover the loan in full
BTo earn higher dividends
CTo avoid paying interest
DTo get voting rights
Answer & Solution
Correct answer: A. To recover the loan in full
If sale of the primary security does not cover the loan, the lender can present or sell the collateral debentures.
Related questions
Compared with convertible debentures, non-convertible ones usually carry what?In the United Kingdom, a debenture is usually what?In United States usage, what does debenture specifically mean?Debenture holders usually lack which right at a company's general meetings?1,00,000 face value of debentures is converted into Rs 10 shares issued at Rs 2.50 premiumA firm cancels debentures of Rs 20,000 face value bought at 92 percent. How much cash doesDebentures of Rs 20,000 face value are bought at Rs 92 per Rs 100 and cancelled. What is tProfit on buying back debentures below par is finally transferred to what?