MANAGEMENT

Detailed explanation-1: -Explanation: Debentures are a debt instrument utilised by organisations and governments to give credit. Debentures are otherwise called a bond that fills in as an IOU among purchasers and issuers.

Detailed explanation-2: -Interest on debt have to be paid regardless of whether or not a firm has earned a profit. Also, the borrowed funds have to be repaid at a fixed time. The risk of default on payment is known as financial risk which has to be considered by a firm likely to have insufficient shareholders to make these fixed payments.

Detailed explanation-3: -Fixed assets are not a source of finance for a company.

Detailed explanation-4: -Creditors are not the source of fixed capital.

Detailed explanation-5: -Organisations use debentures when they need to borrow cash at a fixed rate of interest for their development. Hence, debentures are not a part of the owner’s capital.