What is a characteristic of irredeemable debentures?

Irredeemable debentures, also known as perpetual debentures, are financial instruments that do not have a specified maturity date, meaning they cannot be redeemed by the issuer for repayment of principal. A key characteristic of these debentures is that the interest payments made to debenture holders are considered an expense for the issuing company, which allows the company to deduct these interest payments from its taxable income. This tax deductibility provides a financial advantage to the issuer, as it effectively reduces the overall cost of borrowing.

The other characteristics listed do not align with irredeemable debentures. For instance, they do not pay dividends, which are typically associated with equity securities, not debt instruments like debentures. Also, while some debentures may be secured against company assets, irredeemable debentures can be either secured or unsecured. Lastly, since these are termed 'irredeemable,' they lack a maturity date when the principal amount must be repaid, distinguishing them from redeemable debentures.