What is Debentures? Definition, Meaning, Types and Transactions | maijson GKB.
Debentures is a kind of debt instrument used by businesses to raise money is debentures. A business effectively borrows money from investors or the general public when it issues debentures and holders of debentures are entitled to the principal amount as well as fixed interest payments at the time of maturity. Below are some key features of debentures: Debt Instrument: A firm may borrow money for a desired period of time by issuing debentures. Debentures are a type of debt where the company pledges to repay the principal amount plus interest, in contrast to equity, which symbolizes ownership in the company. Fixed Interest Payments: D ebentures holders get fixed interest payments on a monthly, quarterly or annually basis. Debentures are different from several other forms of bonds in which interest rate is fixed. Maturity Date: Debentures have a maturity date, after which the company must pay the principal amount to the holders. The length of the maturity period depends on ...