Which statement regarding debentures is true?

Debentures are a type of debt instrument that companies use to raise capital. When it comes to the statement regarding their characteristics, the assertion that they have a contractual right to interest is indeed accurate. This is a key feature of debentures. When an entity issues debentures, they are essentially entering into a formal contract with the debenture holders, stipulating that the issuer must make regular interest payments, typically at a predetermined rate. This contractual obligation to pay interest is what distinguishes debentures from equity financing; debenture holders are creditors and do not have an ownership stake in the company.

In contrast, the other statements misunderstand the nature of debentures. The claim that debentures do not guarantee interest payments is incorrect because the contract explicitly specifies those payments. The assertion about being payable only if profits are available applies to equity (like dividends), which are discretionary and contingent on the company's profitability, but debenture interest is a legal obligation payable regardless of profit. Finally, the statement that debentures represent ownership in the company is false, as they are debt securities, and debenture holders do not have an equity interest or a claim on the company’s assets beyond what is stipulated in the debenture agreement.