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Answer: (a) interest — The interest is paid on borrowed capital.

Borrowed capital (debentures, bonds, deposits, loans) is provided by creditors, and the company pays them interest at a fixed rate whether it earns a profit or not. Dividend is paid to shareholders on owned capital, and discount is an allowance on the price of a security.

Doubtly AI · 29 Oct 2026 AI-verified · Nov 2026 Report
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