— Kishore V, SME and ACW at Edumarz
The scenario under which a corporation is authorised by its Articles of Association to acquire its own debentures is referred to as “redemption of debentures by purchase in open market.”
The debentures are being bought for the following reasons:
1. As a source of investment that may be sold for a bigger profit at a later period.
2. To cancel debenture liabilities if the rate of interest on the debenture is higher than the market rate of interest.