FinanceTurf.com All about Finance!!

A company can raise funds through issue of debentures too, but it bears a fixed rate of interest on it.

Debenture Investments

The debenture issued by a company is an acknowledgement that a company has borrowed a certain amount of money, which it promises to repay at a future date. Therefore debentures are creditors for the company.

Debentures are fixed-interest securities or debt securities on which the issuer pays interest at a fixed rate and for a specific term.

Generally, the level of income paid on debentures is higher than the rate paid on cash investments because of the longer term of the investment.

Debentures can be classified as follows:-

a) Mortgage or Secured Debentures

b) Unsecured Debentures

c) Redeemable Debentures

d) Irredeemable Debentures

e) Registered Debentures

f) Bearer Debentures

g) First Debentures

h) Second Debentures

Do Post Your Comments..