[amp_mcq option1=”debentures at premium” option2=”equity shares” option3=”bonds” option4=”fixed deposits certificates” correct=”option1″]<\/p>\n
The correct answer is A. debentures at premium.<\/p>\n
A debenture is a long-term debt instrument issued by a company. It is a loan that the company borrows from investors, and the investors are repaid with interest over time. Debentures are typically issued at a premium, which means that the investors pay more than the face value of the debenture when they buy it. This premium is used to compensate the investors for the risk of lending money to the company.<\/p>\n
When a company redeems its preference shares, it pays the holders of those shares the face value of the shares, plus any accrued dividends. The company can use the proceeds from the sale of debentures to fund the redemption of its preference shares.<\/p>\n
Option B, equity shares, is incorrect because equity shares are not a type of debt instrument. Equity shares represent ownership in a company, and they do not have a fixed maturity date. Option C, bonds, is incorrect because bonds are a type of debt instrument, but they are not typically issued at a premium. Option D, fixed deposits certificates, is incorrect because fixed deposits certificates are a type of deposit, not a type of debt instrument.<\/p>\n","protected":false},"excerpt":{"rendered":"
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