Tag: non-institutional sources - long-term

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Multiple choice organisation of commerce and management sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

A company can raise funds through issue of debentures, which bear a ________ rate of interest.

  1. fixed

  2. fluctuating

  3. higher

  4. lower
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Debentures can be issued by a company to raise funds as long term debt capital, which the company promises to return back on a fixed rate of interest. 

Multiple choice organisation of commerce and management sources of business finance - 2 debentures / bonds debentures non-institutional sources - long-term

Debenture holders are paid _________ stated amount of interest at specified intervals.

  1. fixed

  2. fluctuating

  3. higher

  4. lower
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Debenture holders are paid a fixed stated amount of interest at specified intervals. Public issue of debentures requires that the issue be rated by a credit rating agency.