Business And Commerce - Study Mode

[#231] Which of the following is not an ownership security?
Correct Answer

(C) Debentures

Explanation

Solution: Debentures is not an ownership security. A debenture is a type of debt instrument that is not secured by collateral and usually has a term greater than 10 years. Debentures are backed only by the creditworthiness and reputation of the issuer. Both corporations and governments frequently issue debentures to raise capital or funds.

[#232] In which of the following, interest / dividend is payable even if the company does not earn profit?
Correct Answer

(C) Debentures

Explanation

Solution: In Debentures, interest / dividend is payable even if the company does not earn profit. No matter what happens – profit or loss, a firm needs to pay interest to its debenture holders/lenders. Only when a company makes a profit, a dividend is distributed.

[#233] Debentures cannot be ________.
Correct Answer

(C) registered

Explanation

Solution: Debentures cannot be registered. A debenture is issued to the general public by an organization

[#234] Ploughing back of profits means __________.
Correct Answer

(C) retaining the earnings

Explanation

Solution: The ‘Ploughing Back of Profits’ is a management policy under which all profits are not distributed amongst the shareholders, but a part of the profit is ‘Ploughed back’ or retained in the company.

[#235] Deferred shares can be issued by ________.
Correct Answer

(B) private company

Explanation

Solution: According to Companies Act 1956, no public limited company or which is a subsidiary of a public company can issue deferred shares.