Q157
Which of the following securities proves a burden on finances of the company, when company is not earning profits?
A.
Equity shares
B.
Preference shares
C.
Redeemable preference shares
D.
Debentures
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Debentures proves a burden on finances of the company, when company is not earning profits. Debenture put a permanent burden on the earnings of a company. Therefore, there is a greater risk when the earnings of the company fluctuate.