What are the two components of the income from redeemable debentures?

The income generated from redeemable debentures is characterized by two key components: fixed interest and a redemption amount.

Fixed interest refers to the regular coupon payments that debenture holders receive, which are typically predetermined and paid at set intervals over the life of the debenture. This aspect is vital for investors seeking stability and predictability in their returns, as the fixed interest provides a consistent income stream.

The redemption amount represents the principal sum that is returned to the debenture holder at the time of redemption, which typically occurs at the maturity date of the debenture. This ensures that investors not only earn income during the holding period through interest payments but also receive their initial investment back when the debenture reaches maturity.

Together, these components make redeemable debentures an appealing investment choice for those looking for a balance of income generation and capital preservation. The other options do not accurately reflect the nature of redeemable debentures, as they include elements such as royalties or dividends, which are associated with equity instruments rather than fixed-income securities like debentures.