2178. Which of the following securities proves a burden on finances of the company, when company is not earning profits?

Equity shares
Preference shares
Redeemable preference shares
Debentures
✅ The correct answer is D.
Debentures proves a burden on finances of the company, when company is not earning profits. Debenture put a permanent burden on the earnings of a company. Therefore, there is a greater risk when the earnings of the company fluctuate.

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