can debenture redeem at discount
Hey buddy
Debentures cannot be redeemed at discount because nobody wants to get lesser amount than invested in the business.
If you purchase 10 Debentures of a company at a price of Rs 100 each, the total amount paid by you is Rs 1,000 (100 debentures of Rs 100 each). Will you be willing to receive Rs 90 per debenture (Rs 900 in total for 10 debentures) after a period of 5 years? Obviously not!! Because investments are usually made with a motive to earn profit instead of incurring losses.
Hence, debentures are redeemable only at par and premium and not at discount.
Debentures cannot be redeemed at discount because nobody wants to get lesser amount than invested in the business.
If you purchase 10 Debentures of a company at a price of Rs 100 each, the total amount paid by you is Rs 1,000 (100 debentures of Rs 100 each). Will you be willing to receive Rs 90 per debenture (Rs 900 in total for 10 debentures) after a period of 5 years? Obviously not!! Because investments are usually made with a motive to earn profit instead of incurring losses.
Hence, debentures are redeemable only at par and premium and not at discount.