Debentures are long-term debt instruments issued by companies or governments to raise funds. When individuals or institutions buy debentures, they are essentially lending money to the issuer. In return, the issuer promises to pay periodic interest (coupon payments) and return the principal amount at the maturity date. Debentures are not secured by specific assets but rely on the issuer's overall creditworthiness. They serve as a way for organizations to raise capital by borrowing from investors.
A debenture is a type of loan, or a long-term debt instrument issued by a company or organisation to raise funds from the public or institutional investors. It is essentially a form of loan that investors provide to the issuer, typically a corporation, or government entity.
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Explanation:
Debentures are long-term debt instruments issued by companies or governments to raise funds. When individuals or institutions buy debentures, they are essentially lending money to the issuer. In return, the issuer promises to pay periodic interest (coupon payments) and return the principal amount at the maturity date. Debentures are not secured by specific assets but rely on the issuer's overall creditworthiness. They serve as a way for organizations to raise capital by borrowing from investors.
Answer:
A debenture is a type of loan, or a long-term debt instrument issued by a company or organisation to raise funds from the public or institutional investors. It is essentially a form of loan that investors provide to the issuer, typically a corporation, or government entity.
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