The correct answer is: D. Debentures
Debentures are a type of loan that a company takes out from investors. The investors, or debenture holders, are entitled to a fixed rate of interest on their investment, which is paid out by the company on a regular basis. If the company is not earning profits, it may not be able to afford to pay the interest on its debentures, which can put a strain on its finances.
Equity shares are a type of ownership in a company. The shareholders are entitled to a share of the company’s profits, if any. However, they are also the last in line to receive any money if the company goes bankrupt.
Preference shares are a type of equity share that has a higher priority than ordinary shares when it comes to receiving dividends and assets in the event of a liquidation. However, they do not have voting rights.
Redeemable preference shares are a type of preference share that can be redeemed by the company at a specified date. This means that the company can repay the loan to the investors at any time, which can be helpful if the company is struggling financially.
In conclusion, debentures are the most likely to prove a burden on the finances of a company that is not earning profits. This is because the investors are entitled to a fixed rate of interest, which the company may not be able to afford to pay if it is not making a profit.