Question

State the types of debentures from the point of view of convertibility.

Hint:

Convertible debentures give the option to convert them into shares, while non-convertible debentures do not.

Answer 1

Step 1: Definition of debentures.
Debentures are debt instruments issued by a company to raise funds. They carry a fixed rate of interest and are redeemable after a certain period.
Step 2: Types of debentures based on convertibility.
1. **Convertible Debentures:** These can be converted into equity shares of the company after a specified period.
2. **Non-Convertible Debentures (NCDs):** These cannot be converted into equity shares and are repaid with interest at the time of maturity.
Step 3: Conclusion.
Thus, debentures can be classified as convertible and non-convertible based on their convertibility into equity shares. Final Answer: \[ \boxed{\text{1. Convertible Debentures, 2. Non-Convertible Debentures}} \]