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What type of loan is a convertible debenture?
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 of conversion.
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?
What do you mean by ex-interest in issue and redemption of debentures in company account?
Whan compay purchase debenture from the open market
If someone holds a debenture what can they do with it?
With a debenture, a company can hold a debt with another. A debenture is a loan agreement where there is no collateral or assets involved. It is based on the promise and credit history of the company that it will be paid back.
What is cost of debenture?
The cost of debenture refers to the effective interest rate or yield that a company pays to its debenture holders for the borrowed funds. It includes the interest payments made to investors and any issuance costs, expressed as a percentage of the total amount raised through the debenture. This cost is critical for companies as it impacts their overall financing costs and financial performance. Understanding this cost helps in evaluating the attractiveness of using debentures for funding compared to other financing options.
What happens to a convertible debenture after liquidation of a company?
Its worthless.
What is the difference between a convertible bond and a convertible debenture?
A convertible debenture is a type of convertible bond. However, a debenture is unsecured debt, which means that there is no collateral for the bond. The alternative to a debenture would be a secured bond such as a mortgage bond that would be secured by real estate. If the company goes out of business, the collateral for the secured bonds would be used to pay off those bonds and the holders of the debentures would be paid from whatever is leftover. Most convertible bonds are debentures.
What type of loan is a convertible debenture?
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 of conversion.
Where does debenture interest go?
Debenture interest is typically paid to the debenture holders, who are creditors of the issuing company. This interest represents the cost of borrowing for the company and is usually paid at predetermined intervals, such as annually or semi-annually. The interest payments are considered an expense for the company, reducing its taxable income, while providing a fixed income stream for the investors holding the debentures.
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 A debenture holder of the company a creditor of the company?
No, A debenture bond owner is just like any other bond owner. A debenture bond is an uninsured bond. The owner of a bond is just lending their money to a company for a long-term period. A bond is an example of a long-term debt. An owner of a company would be an example of an equity such as a stockholder (common, or preferred).
What is nature of interest on debenture?
The debentures of a company are a movable property, transferable in the manner provided by the Articles.
What is the nature of interest on debenture.?
The debentures of a company are a movable property, transferable in the manner provided by the Articles.
Debenture holder treated as member or not?
No,debenture holders are not treated as members. Debentures are mere debts and debenture holders are just creditors.They give their money to the company at a fixed interest rate.Debenture holders being creditors get guaranteed interest, as agreed, whether the company makes profit or not. Also debenture holders have no right to attend and vote at the meetings of the share holders. Answered By:- Karunakar Gautam DCE Student
Is debenture holder a customer of the company?
NO,debenture holder is the creditor of the company
What are the reasons for the creation of debenture redemption reserve fund?
Indian Companies Act of 1956 added during an amendment in the year 2000. It states Indian company that issues debentures must offer debenture redemption service to protect investors against the possibility of company default. If a company does not create a reserve within 12 months of issuing the debentures, they will be required to pay 2 percent interest in penalty to the debenture holders. Only debentures that were issued after the amendment in 2000 are subject to the debenture redemption service.
What is Debenture Redemption Reserve?
Debenture is a debt instrument to raise funds. It has a maturity period associated with it. At the end of the maturity, the company(borrower) should return the interest and principal amount. Debenture Redemption Reserve is an amount kept as reserve for paying the debenture holder at the end of the maturity period.
