• Answer of this question

    what is debenture
    Davneet Singh's image
    Davneet Singh

    Debenture is a kind of loan taken from public

    Interest is payable on it just like it is payable on loan

     

    Suppose a company needs money for business of 500 lacs

    He can either approach bank for loan @ 15% FOR 3 YEARS

    Also,.he can approach public by issuing debentures @ 13% for Years

     

    Just like loan is to be repaid after fixed number of years,debentures are to be repaid after fixed number of yesrs to public

     

    Note-

    Debentures can be issued only by big Public Limited Companies

    (and not by proprietorship/partnership or private limited companies)

     


    Written on Aug. 31, 2016, 11:37 a.m.