What Is Debenture Loans?


Debentures (or loan stock) exist as an alternative form of investing in a company that is more secure than investing in shares because interest payments must be made by the company and must be paid before dividends. Dividends, in contrast to debentures, are paid at the company's discretion.
Q&A Related to "What Is Debenture Loans"
This is the type of loan which could be converted later into goods or stocks. This permits the company who takes the loan to pay less interest rest then if it was without this option
1.Avoid Dilution. When a corporation issues more stock, its current shareholder stakes may be diluted. For example, a shareholder who owns 100,000 out of 1 million shares of stock
It is defined as a certificate of acceptance of loans which is given under the company's stamp and it carries an undertaking that the debenture holder will get a fixed return (fixed
Before the issue, the company enjoys greater flexibility in designing the debenture issue whereas after the issue, the company hardly has any freedom in re-negotiating the terms of
1 Additional Answer
Debenture loans are long term loans, usually taken by companies where they agree to pay at a specified future date. The loan is repaid in a fixed rate of interest to the debenture holder annually until maturity. Should the company fail to pay either the interest or principal amount at maturity of the loan; the debenture holders can force the company into liquidation to pay the amount due.
About -  Privacy -  Careers -  Ask Blog -  Mobile -  Help -  Feedback  -  Sitemap  © 2014 Ask.com