A type of fixed-interest security, issued by companies (as borrowers) in return for medium and long-term investment of funds. A debenture is evidence of the borrower's debt to the lender. The word derives from the Latin debeo, meaning 'I owe'. Debentures are issued to the general public through a prospectus and are secured by a trust deed which spells out the terms and conditions of the fundraising and the rights of the debenture-holders. Typical issuers of debentures are finance companies and large industrial companies. Debenture-holders' funds are invested with the borrowing company as secured loans, with the security usually in the form of a fixed or floating charge over the assets of the borrowing company. As secured lenders, debenture-holders' claims to the company's assets rank ahead of those of ordinary shareholders, should the company be wound up; also, interest is payable on debentures whether the company makes a profit or not. Debentures are issued for fixed periods but if a debenture-holder wants to get his or her money back, the securities can be sold. or A Debenture is a long-term Debt Instrument issued by governments and big institutions for the purpose of raising fund

it is borrowed capital of company .a debenture is a secured to the debenture holder's hands & it can be refundable to them with certain rate of interest.debenture capital is a borrowed capital of the company.debentures are reedeemed after certain predefined period. or debentures is a kind of loan taken by the company ,who issues a document with the seal to the investor,and pay them a fixed rate of dividend.every company requires money to start up their business, so it issues shares and debentures for the collection of funds. or Debenture is an instrument which is used for fundraising by large companies from public/private financial Institutions.it is also called borrowed capital.the company give some fixed rate of interest over these debenture to the debenture holders.Debenture are not secured by any physical asset or colletaral.it is only backed by the creditworthness or reputation of the company whom offered the debentures.or Debenture is liability to the company. When shareholders's amount or capital is not enough to run the business or company requires more amount, then company borrows the required amount in the form of debenture.

what is debenture?

168 Views|Posted 2010-08-24 09:54:04

Asked by Nazeer

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Priya Saxena | Guide-Level 11

2010-08-26 15:09:32

Hi Nazeer, Debentures are long-term Debt Instrument issued by governments and big institutions for the purpose of raising funds.These are backed by the credit worthiness and reputation of the Debenture issuer. Kindly revert for any further queries, also if you liked this answer then rate it 'Best a

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Answered by

Prinkya | Beginner-Level 3

2010-08-24 10:09:40

A type of fixed-interest security, issued by companies (as borrowers) in return for medium and long-term investment of funds. A debenture is evidence of the borrower's debt to the lender. The word derives from the Latin debeo, meaning 'I owe'. Debentures are issued to the general public through a pr

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Answered by

Nishant Birman | Contributor-Level 8

2010-08-24 12:06:26

it is borrowed capital of company .a debenture is a secured to the debenture holder's hands & it can be refundable to them with certain rate of interest.debenture capital is a borrowed capital of the company.debentures are reedeemed after certain predefined period. or debentures is a kind of loa

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