— Kishore V, SME and ACW at Edumarz
Yes, a firm can buy its own debentures on the open market provided its Articles of Association allow it. The following are some of the key reasons for making such a purchase:
I) A corporation may acquire its own debenture for prompt cancellation in order to reduce its debenture debt, particularly if the debenture’s interest rate is greater than the market rate of interest.
(ii) A firm may also acquire its own debentures with the intent of making a profit by selling them at a higher price in the future.