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A public limited liability company can get additional fund through the issue of

Accounts - Principles of Accounts
JAMB 2024

A public limited liability company can get additional fund through the issue of

  • A. cheque
  • B. accumulated fund
  • C. consolidated fund
  • D. debenture
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Correct Answer: Option D
Explanation

Issuing debentures allows a PLC to raise capital from investors. Debentures are essentially loans provided by investors to the company. The company promises to repay the principal amount borrowed along with interest a a predetermined rate. Debenture holders are creditors of the company, ranking higher than shareholders in term of claims on the company's assets in case of liquidation.


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