A debenture holder is entitled to _______.

Correct option is C

A debenture holder is entitled to interest at a fixed rate, as stated in the terms of the debenture issue, irrespective of whether the company makes a profit or not. Unlike shareholders, debenture holders are creditors of the company and do not have voting rights or any claim to the profits of the company.

Information Booster:

1. Debentures are debt instruments issued by companies to raise funds, typically repayable after a specified period.
2. Interest on debentures is paid periodically, and the rate is pre-determined.
3. Debenture holders do not participate in the company’s profits or management.
4. Debentures can be secured or unsecured, depending on whether assets are pledged as collateral.
5. The repayment of principal and interest to debenture holders takes priority over payments to shareholders in case of liquidation.

Additional Knowledge:

• (a) Dividend: Paid to equity shareholders, not debenture holders.
• (b) Profit share: Only shareholders are entitled to a share of the profits.
• (c) Interest as per fixed interest rate: Correct; debenture holders earn interest at a fixed rate, as per the terms of the issue.
• (d) Voting rights in the company: Only equity shareholders have voting rights; debenture holders do not.