Debenture Remove Sentence For Free

What is a Debenture? A debenture is a bond issued with no collateral. Instead, investors rely upon the general creditworthiness and reputation of the issuing entity to obtain a return of their investment plus interest income.Examples of debentures are Treasury bonds and Treasury bills.

A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.

These debentures are issued for a specified period of time. On the expiry of that specified time the company has the right to pay back the debenture holders and have its properties released from the mortgage or charge. Generally, debentures are redeemable.

A debenture is a bond issued with no collateral.Both corporations and governments make use of debentures. Examples of debentures are Treasury bonds and Treasury bills.

These debt securities are a common form of long-term financing taken out by corporations. Debentures carry either a floating or a fixed-interest coupon rate return to investors and will list a repayable date.

Disadvantages of DebenturesEach company has certain borrowing capacity.With redeemable debenture, the company has to make provisions for repayment on the specified date, even during periods of financial strain on the company.Debenture put a permanent burden on the earnings of a company.

Advantage of DebenturesDebentures do not give right either to vote or take part in the management of the company.The Debenture is tax deductible expenditure which can save income tax.Cost of debenture is relatively lower than preference shares and equity shares.Debentures are advantageous during times of inflation.More items...