What are Debenture shares


This article is about debentures

Debenture shares?

Debenture shares is one type of loan which company has to return after a fix period of time with reasonable rate of intrest.

A person who holds debentures in company is called Debenture holder.He"s also known as creditor of company.

Debentures are safe option to invest.Why?

As debentures are not permanent capital of the company it has to be returned after a fix period of time.In the meanwhile if something happens to company debenture holder can sell the assests of the company and get their capital back.Thats why debentures are considered as good option as it gives nominal intrest plus your capital is also secured.


Comments

Author: Lalitha Ganesan13 Sep 2010 Member Level: Diamond   Points : 2

Hi debentures are one way of raising capital for the company when the company do not want to raise capital by way of fresh equity. Debentures can take the form of convertible and non convertible debentures Convertible debentures are those where part of the debenture face value is converted into shares after specified years without the debenture holder having to make any payment. And as per the terms of issue, balance of the debenture is repaid after specified number of years

Author: Nikhil Dhondiram Bille14 Sep 2010 Member Level: Gold   Points : 1

Hello,

Debenture has no risk.. but share has more risk...

Debenture has less revenue than share.. But it has no risk..



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