IAS Economy Practice Question . 23

Consider the following statements about a debenture:
1. It is a debt instrument
2. Its freely transferable
3. Its holder has voting rights in company’s annual general meetings
4. It is a part of company’s capital structure
Which among the above statements is/ are correct?
[A] Only 1 & 2
[B] Only 2 & 3
[C] Only 3 & 4
[D] Only 1 &2, 4

Answer: Only 1 &2, 4
Debenture is a debt instrument and freely transferable. It makes a part of company’s capital but its holders are NOT able to participating in the voting in the annual general meetings.