XYZ Ltd. has been operating in the field of FMCG products in South Indian market. However, to expand its operation in northern part of India, it needs additional capital ₹ 20,00,000 which is raised by issuing 10% Debenture of ₹ 12,00,000 of ₹ 100 issued at a discount of 10% to be repayable after 6 years. The rest of the funds is raised by issuing 5% debenture of ₹ 8,00,000 of ₹ 100 issued at 15% premium. These debentures are perpetual in nature. After six years of successful operation in northern India, company took a loan of ₹ 5,00,000 from PNB against 5% debenture of ₹ 8,00,000 of ₹ 100 each as a collateral security. The company successfully ran its operation and managed to pay off its loan within two years.