Question

28. Redemption of Debentures/Preference shares results into:
(a) Source of fund
(b) Use Or application of fund
(c) No flow of fund
(d) No flow of cash​

Answer 1

Answer:

Option A "Source of fund"

Answer 2

Answer:

(b) Use or application of fund

Explanation:

Debentures are financial instruments issued to public for recieving loan.
Secured debentures are secured against assets, and unsecured debentures are not secured

Preference shares are shares which recieve dividend before Equity shares.

The above securities can be either redeemed for cash or converted to equity shares fully or partially.When these are redeemed for cash, the company has to pay them cash.Hence it is use of fund