Debenture Bond for Dummies
noun
pronunciation: dɪ'bɛnʧər_bɑndWhat does Debenture Bond really mean?
Hey there! So, a debenture bond is a type of bond that a company issues to raise money. A bond is basically like a loan that you give to a company or the government. When you buy a debenture bond, you're lending your money to the company that issued the bond, and in return, they promise to pay you back the money plus interest at a later date.
Now, the cool thing about debenture bonds is that they are not backed by any specific collateral, like a piece of property or equipment. This means that if the company goes bankrupt or defaults on the bond, you might not get all of your money back. It's kind of like when you lend your friend money without them giving you anything in return to hold onto until they pay you back.
On the flip side, because there's no specific collateral backing the bond, companies that issue debenture bonds often have to pay higher interest rates to attract investors. It's like when you lend your friend money without any guarantee that they'll pay you back, so you ask for a little bit extra to make it worth your while.
So, in a nutshell, a debenture bond is a type of bond that a company issues to raise money, and it's not backed by any specific collateral. It's like lending your money to a company without any guarantee that you'll get it all back, but in return, they promise to pay you back with some extra money on top. Cool, right?
Now, the cool thing about debenture bonds is that they are not backed by any specific collateral, like a piece of property or equipment. This means that if the company goes bankrupt or defaults on the bond, you might not get all of your money back. It's kind of like when you lend your friend money without them giving you anything in return to hold onto until they pay you back.
On the flip side, because there's no specific collateral backing the bond, companies that issue debenture bonds often have to pay higher interest rates to attract investors. It's like when you lend your friend money without any guarantee that they'll pay you back, so you ask for a little bit extra to make it worth your while.
So, in a nutshell, a debenture bond is a type of bond that a company issues to raise money, and it's not backed by any specific collateral. It's like lending your money to a company without any guarantee that you'll get it all back, but in return, they promise to pay you back with some extra money on top. Cool, right?
Revised and Fact checked by Brian Anderson on 2023-11-15 05:54:01
Debenture Bond In a sentece
Learn how to use Debenture Bond inside a sentece
- When a company needs to borrow money, it can issue a debenture bond to investors in exchange for a promise to repay the borrowed amount plus interest in the future.
- Investors who buy a debenture bond from a company are essentially lending money to the company and in return, the company pays them back with interest at a later date.
- A debenture bond is a type of long-term investment that provides a fixed income to the bondholder over time, typically through regular interest payments.
- Unlike other types of bonds, debenture bonds are not secured by any specific asset, which means they are backed only by the creditworthiness of the issuing company.
- If a company goes bankrupt, debenture bondholders are considered general creditors and may not receive their full investment back, making them riskier than secured bonds.
Debenture Bond Synonyms
Words that can be interchanged for the original word in the same context.
Debenture Bond Hypernyms
Words that are more generic than the original word.