Debenture for Dummies
noun
pronunciation: dɪ'bɛnʧərWhat does Debenture really mean?
Hey there! So, let's talk about the word "debenture." I know it might sound like a big, fancy word, but I think I can break it down for you in a way that makes sense.
Okay, so a debenture is basically a type of loan that a company takes out. When a company needs to borrow money, they can issue debentures to people or other companies who are willing to lend them the money. In return, the company promises to pay back the loan amount, along with any agreed-upon interest, at a future date.
Think of it like this: when you lend money to a friend, you trust that they'll pay you back, right? A debenture is kind of like that, but on a bigger scale. The company is the borrower, and the people or companies who lend them money are the ones holding the debentures.
Now, there are different types of debentures, like convertible debentures, which can be exchanged for stocks in the company, or secured debentures, which are backed by specific assets of the company.
So, in simple terms, a debenture is just a way for a company to borrow money, and it's a promise to pay it back in the future. It's kind of like an IOU, but for businesses instead of individuals. I hope that makes sense! Let me know if you have any other questions.
Okay, so a debenture is basically a type of loan that a company takes out. When a company needs to borrow money, they can issue debentures to people or other companies who are willing to lend them the money. In return, the company promises to pay back the loan amount, along with any agreed-upon interest, at a future date.
Think of it like this: when you lend money to a friend, you trust that they'll pay you back, right? A debenture is kind of like that, but on a bigger scale. The company is the borrower, and the people or companies who lend them money are the ones holding the debentures.
Now, there are different types of debentures, like convertible debentures, which can be exchanged for stocks in the company, or secured debentures, which are backed by specific assets of the company.
So, in simple terms, a debenture is just a way for a company to borrow money, and it's a promise to pay it back in the future. It's kind of like an IOU, but for businesses instead of individuals. I hope that makes sense! Let me know if you have any other questions.
Revised and Fact checked by Sarah Anderson on 2023-11-15 06:00:47
Debenture In a sentece
Learn how to use Debenture inside a sentece
- When a company needs to raise money, it can issue debentures to investors in exchange for cash.
- A debenture holder has the right to receive regular interest payments from the company that issued the debenture.
- If a company goes bankrupt, debenture holders are typically paid before shareholders because their investment is considered more secure.
- A debenture can have a fixed maturity date, at which point the company will repay the principal amount to the debenture holder.
- Investing in debentures can be less risky than investing in stocks, as debenture holders have a higher claim on the company's assets in case of liquidation.
Debenture Synonyms
Words that can be interchanged for the original word in the same context.
Debenture Hypernyms
Words that are more generic than the original word.
Debenture Category
The domain category to which the original word belongs.