Question

    How is the return on debentures

    determined?
    A Through interest payments Correct Answer Incorrect Answer
    B Through dividend payments Correct Answer Incorrect Answer
    C Through principal repayments Correct Answer Incorrect Answer
    D Through share buybacks Correct Answer Incorrect Answer

    Solution

    Explanation: Debenture holders receive a return on their investment through interest payments, which are a fixed rate of return paid by the company to the investor. The interest rate is determined at the time the debenture is issued.

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