Assertion (A): Financing through debentures is less costly. Reason (R): Debentures do not carry voting rights. Therefore, financing through debentures does not dilute control of equity shareholders on management.

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KollegeApply · Accepted Answer

Both Assertion (A) and Reason (R) are True and Reason (R) is not the correct explanation of Assertion (A). Explanation: Debentures are less costly because interest is tax-deductible, not because they don’t dilute voting rights. Both statements are true, but they are unrelated.

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