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Debenture capital refers to a form of long-term debt financing where a company issues debentures, which are unsecured bonds that promise to pay a fixed interest rate over time. Unlike traditional loans, debentures are often used to raise capital directly from investors without requiring collateral. Investors receive regular interest payments and the principal amount at maturity. This type of financing is commonly used by corporations to fund expansion or other significant projects.
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Examine Debenture can be redeemed only out of capital?
No Debentures can not be redeemed out of capital only. Gov of India and SEBI has indirectly placed restrictions on redemption of debentures. Now it is compulsory to create Debenture Redemption Reserve at-least 50% of the debentures issued.
How can a company rise capital?
Company can mainly raise its capital by issuing equity or debt instrument e.g stocks bonds preference share debenture loans etc
Why debentures are not forfeited?
debenture is a loan to company and its face value will be higher moreover it carries fixed interest which is charge against profits.so there is no chance from the side of debenture holder for non payment of calls after repeated notices from the company. from the view point of company it cannot forfiet a debenture and treat it as a capital profit because they are not owners is this explanation coreect for that question?
Is debenture a current asset?
No. Debenture is a form of liability for a business.
What is debendure?
I presume you meant debenture, a debenture is a long term loan taken out by a business
What are the disadvantages of debenture capital?
High Denominations People can Buy the Debenture Certificate and can not buy other people.
Difference between Debenture Redemption Reserve and Capital redumption Reserve?
The Capital Redemption Reserve is a fund that secures a creditor. Debenture Redemption Reserve is for the purpose of security payments only.
Examine Debenture can be redeemed only out of capital?
No Debentures can not be redeemed out of capital only. Gov of India and SEBI has indirectly placed restrictions on redemption of debentures. Now it is compulsory to create Debenture Redemption Reserve at-least 50% of the debentures issued.
How do you pay for debenture?
To pay for a debenture, an issuer typically raises funds through the sale of the debenture to investors, who then provide the capital upfront. The issuer agrees to pay periodic interest, known as coupon payments, to the debenture holders until maturity. At maturity, the principal amount is repaid to the debenture holders. Payment can be made through various means, such as bank transfers or checks, depending on the terms set during the issuance.
Why premium on redemption of debenture credit at the time of issue of debenture?
It is capital loss of the company. It comes only in the time when redeem debenture. It is shown when we issue the debenture because it is one of the redeemable condition. it is loss of future but comes in balance sheet as separate account the name of premium redemption account in liability side so, it is carried at the time of issue.
How can a company rise capital?
Company can mainly raise its capital by issuing equity or debt instrument e.g stocks bonds preference share debenture loans etc
What is a debenture certificate?
it is a document that serve as evidence of a debenture for a debenture share holder
What is debenture certificate?
it is a document that serve as evidence of a debenture for a debenture share holder
What are the Merits and demerits of debentures?
Hi merit of dbenture - trading on equity is possible as debenture holders get a lower rate of return than the earnings of the company. demerit of debenture-cost of raising capital through debentures is high of high stamps duty.
Why debentures are not forfeited?
debenture is a loan to company and its face value will be higher moreover it carries fixed interest which is charge against profits.so there is no chance from the side of debenture holder for non payment of calls after repeated notices from the company. from the view point of company it cannot forfiet a debenture and treat it as a capital profit because they are not owners is this explanation coreect for that question?
Solve questions of debenture in advance accounting?
what is debenture
What source of capital would minimize the cost of capital to a subsidiary?
long term debenture will certainly minimise the cost of capital due to low interest and longer time frame to return the loan (more time to plan and to get return)...
