Multiple choice

Which of the following is not an equity instrument?

  1. Preference shares

  2. Equity warrants

  3. Ordinary debentures

  4. Convertible debentures
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Preference shares and equity warrants are equity instruments. Convertible debentures, while technically debt, have an equity conversion feature. Ordinary debentures are pure debt instruments with no equity component - they represent a loan from the investor to the issuer with fixed interest payments, making them the only non-equity instrument listed.

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