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What do you mean by cancellation of debenture assuming that co. Have sufficient debenture redemption on reserve.

Asked by nancysundrani23 9th February 2019, 8:05 AM
Answered by Expert
Answer:

Debentures can be purchased from open market for teh following 2 purposes:

1. For the purpose of cancellation: When the company do not want to keep that debenture anymore then it may cancel that purchased debentures after passing necessary  Board resolution by the directors to this effect.

2. For the purpose of investment: It is not necessary for a company to immediately cancel its own purchased debentures. When a company has surplus funds, instead of investing these fund in the securities of other companies, it buys its own debentures as investment.

Answered by Expert 11th February 2019, 10:33 AM
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