Why are irredeemable debentures are also known as perpetual debentures
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redeemable debentures are those which will be redeemed after a prescribed time..... for example.. u have one 6%redeemable debenture of face 100 redeemable after 5 years'.......dhen u will recieve 6 rs Per year for 5 years'..and at the end of the fifth year will recieve 100rs(debenture face values) .. that's it the company will take your debenture back....
but when it comes to irredeemable debenture,they are not redeemed by the company...there is no time span/life for the debentures....for eg... u have 6% irredeemable debenture of 100rs facevalue. then u will recieve 6 rs every year continuously till ur death or company's shutdown...since the benefits from it are continuous and not terminable in nature..ee call it as perpetual debentures....however irredeemable debentures are not very much in existence.. they are very rare...and in india as Per law u cannot issue irredeemable debentures..they are prohibited in india
but when it comes to irredeemable debenture,they are not redeemed by the company...there is no time span/life for the debentures....for eg... u have 6% irredeemable debenture of 100rs facevalue. then u will recieve 6 rs every year continuously till ur death or company's shutdown...since the benefits from it are continuous and not terminable in nature..ee call it as perpetual debentures....however irredeemable debentures are not very much in existence.. they are very rare...and in india as Per law u cannot issue irredeemable debentures..they are prohibited in india
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