[Solved] What is the key difference between a convertible debenture and a non-convertible debenture? — Ans: Convertible debentures can be converted into equity shares; non-convertible... | Financial Awareness

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What is the key difference between a convertible debenture and a non-convertible debenture?

AConvertible debentures are issued by government; non-convertible by companies

BConvertible debentures have a fixed maturity; non-convertible have no maturity

CConvertible debentures can be converted into equity shares; non-convertible cannot

DConvertible debentures pay no interest; non-convertible pay interest

Step-by-Step Solution

Step 1: Understand types of debentures
Convertible debentures give holders the option to convert debt into equity shares after a specified period.
Step 2: Analyze other options
Both types have maturity dates; both are issued by companies; both pay interest. The key difference is convertibility.
Final Answer:
Convertible debentures can be converted into equity shares; non-convertible cannot → Option C
Quick Check:
Convertible vs non-convertible debentures = convertibility feature ✅

Quick Trick: Remember: Convertible = option to convert into shares

Common Mistakes:

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What is the key difference between a convertible debenture and a non-convertible debenture?