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Debentures are a type of debt security issued by companies or governments to raise capital. Investors purchase debentures, effectively lending money to the issuer in exchange for periodic interest payments and the return of the principal at maturity. Unlike stocks, debentures do not confer ownership rights and are typically secured against the issuer's assets. They are considered a relatively low-risk investment compared to equities, but they do carry credit risk depending on the issuer's financial stability.
What else can I help you with?
Can private company issue debentures?
YES!
Can public company issue debentures?
Yes
What is debenture explain in simple term?
Debentures refers to discharging the liability on account of debentures in accordance with the terms of issue.
What Advantages does issue of debentures over equity shares?
Cost is the major advantage. Debentures are to be serviced for the contracted period of time, while equity servicing is perennial.
What is the formula of issue of debentures?
The formula for the issue of debentures primarily involves calculating the total amount to be raised and the terms of the debentures, such as the interest rate and maturity period. The basic formula for determining the total debenture issue can be expressed as: Total Amount = Number of Debentures Issued × Face Value per Debenture. Additionally, factors like issuance costs and market conditions can influence the final terms. Proper accounting entries will also reflect the issuance and any related costs.
Discount on issue of debentures is a?
capital loss to be written off over the tenure of the debentures .
Can private company issue debentures?
YES!
Can public company issue debentures?
Yes
What is debenture explain in simple term?
Debentures refers to discharging the liability on account of debentures in accordance with the terms of issue.
Issued debentures by Mahindra and mahindra?
which year mahinra and mahindra issue debenture
What Advantages does issue of debentures over equity shares?
Cost is the major advantage. Debentures are to be serviced for the contracted period of time, while equity servicing is perennial.
What is the formula of issue of debentures?
The formula for the issue of debentures primarily involves calculating the total amount to be raised and the terms of the debentures, such as the interest rate and maturity period. The basic formula for determining the total debenture issue can be expressed as: Total Amount = Number of Debentures Issued × Face Value per Debenture. Additionally, factors like issuance costs and market conditions can influence the final terms. Proper accounting entries will also reflect the issuance and any related costs.
What types of firms would be most likely to issue debentures?
Firms that are well-established and have stable cash flows are most likely to issue debentures, as they can provide the assurance needed to attract investors. Companies in capital-intensive industries, such as utilities, telecommunications, or manufacturing, often issue debentures to finance long-term projects or expansions. Additionally, firms seeking to take advantage of favorable interest rates may also opt for debentures to raise funds without diluting equity.
Companies issued debentures in recent year?
1) Muthoot Finances announced the issue of Non-convertible Debentures for Rs 150 cr. 2) Reliance capital issued Rs 500 cr Non-convertible debentures. 3) Shriram Transport Finances announced the launch of its second secured redeemable non-convertible debentures issue to raise Rs 500 cr. 4) Tata Global Beverages said it raised Rs 325 cr in private placement of debentures.
Why companies issue debentures?
Companies issue debentures to raise long-term capital without diluting ownership, as debentures are a form of debt financing rather than equity. This allows them to fund expansion projects, refinance existing debts, or invest in new opportunities while maintaining control over the company. Additionally, interest payments on debentures are tax-deductible, which can provide financial advantages. Overall, issuing debentures can be a strategic move to leverage growth while managing financial obligations.
What are examples of Debentures?
Debentures are a type of debt instrument that companies issue to raise capital, representing a loan made by investors to the issuer. Examples include convertible debentures, which can be converted into equity shares, and secured debentures, which are backed by specific assets of the company as collateral. Other types include unsubordinated debentures, which have priority over other debts in case of liquidation, and zero-coupon debentures, which do not pay interest but are issued at a discount to their face value.
What are Redeemable debentures?
Redeemable debentures are those securities which are to be repaid within a stipulated period / maturity period. For instance, X co issued 9% 7 years $ 1000 Debentures. This issue of debentures has coupon rate of 9% per year and redeemable period of 7 years. The amount raised by issuing thses debentures are to be repaid within 7 years from now.
