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Debentures
In law, debenture refers to a document which creates or acknowledges a debt. In corporate finance, it refers to an instrument used by companies to loan money. Debentures are generally transferable.
299 Questions
How can I find out about New Jersey Bell Telephone Company Debentures?
By simply looking it up on google, not here because its simple.
What is zero interest debenture?
Issue of the zero interest debenture does not carry any explicit rate of interest.The difference between th face value and the purchase price is the return to the investor(lender).
To redeem a debenture, the holder must typically submit a redemption request to the issuing company ahead of the maturity date, following the terms outlined in the debenture agreement. The company will then pay the principal amount along with any accrued interest. If the debenture is callable, the issuer can redeem it before maturity under specified conditions, often at a premium. Always check the specific terms for any fees or conditions associated with the redemption process.
What is the difference between preference share and debentures?
Debenture and Preference shares are often confused with each other,,
Basically Preference share is an equity type instrument but debenture is a straight forward loan.
Debenture bear fixed interest and its a TAX deductible expense. Company may goes into liquidation if it fails to pay interest on debenture. on the other hand company pay wish to choose not paying any dividend to preference share holder in any given period.
debenture holder are lender to company
Preference share holder owns the company
What are the characteristics of debentures?
1. It is an instrument in writing. An oral promise in acknowledgement of a debt is not a debenture.
2. It is an acknowledgement of the indebtedness of the company to its holder for the amount stated in it.
3. It is usually under the seal of the company but it is not necessary. A certificate signed by two directors of a company and without bearing the company's seal is a valid debenture.
4. It is one of a series of like debentures. But a single debenture may be issued to one man.
5. It provides for the payment fixed sum with interest of a specified rate by a specified time. But this is not essential because a company may issue perpetual debentures. Section 120 of the companies' act 1956 expressly provides for the issue of perpetual or irredeemable debentures w3hich are made payable only in the event of a winding up or some serious default with the company.
6. It is generally secured by a charge, fixed or floating on any part of the company's property or undertaking. But this is, however, not an essential condition because section 2(12) provides that the debentures may or may not constitute a charge on the assets of the company.
From
Rohit Mathur Jaipur
A debenture is a debt security, like a bond is, but unlike a bond a debenture is unsecured. However, the two terms are basically interchangeable--a lot of people call bonds debentures and debentures bonds.
After redemption of debentures, debenture redemption reserve is to be transferred to general reserve.
A debenture is an unsecured bond that's issued either by a governmental or civil corporation and backed only by the credit standing or integrity of the issuer, not collateral. It is documented by an indenture, which is an agreement.
What do you mean by P1 rating in bonds and debentures?
P1" is the highest short-term rating category for Moody's Investor Service. P1 rating are considered to be of high credit quality
How do I go about finding out the information on these two policies?
Difference between debenture and preference share?
Preference shares are equity form of capital while debentures are debt form of capital both type of capital has preference to be paid before the normal share capital holders in case of liquidation but interest paid on debentures is tax deductable which means that by paying interest company can save tax as interest reduces the net income of company while preference share holders receive interest after tax deducted net profit.
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 does debenture differ from ordinary shares?
Debentures also known as loan notes lean more towards non current liabilities i.e. bank loans, than ordinary shares which is equity.
The interest from debentures may be higher than dividen paying shares in the early part of a firm's life; later on it may be more advantageous to hold ordinary shares as dividends paid out can outperform capital gain from interest paid on loans.
Also ordinary shares have voting rights; if enough are purchased by a stakeholder, the stakeholder can influence the company's direction and use of profits. Debenture owners cannot do the same.
How they should be used in fundraising in relation to the possible financial distress?
Model test paper of ncfm investment analysis and portfolio management?
A portfolio comprises of two stock A and B. Stock A gives a return of 9% and Stock B gives a return of 6%. Stock A has a weight of 60% in the portfolio. What is the portfolio return?
Difference between a debenture holder and Investor?
A debenture invests fund in the company and is sure of its return eventhough the company fails through its corporate stock.
An investor can only gain depending upon the market condition.
What you mean by bearer debentures?
these debentures which give an option to their holder to convert them into equity or preference shares at specified rate of exchange after a certain period. when such debenture holders exercise the right of convertion, they cease to be lenders to the company and become its members. the convertible debentures may be fully convertible or partly convertible
