what are debentures used for?

Question

pro's and cons of debentures

Answer 1

In finance, a debenture is a long-term debt instrument used by governments and large companies to obtain funds. It is similar to a bond except the securitization conditions are different. The good is a debenture is usually unsecured in the sense that there are no liens or pledges on specific assets.
The bad part is it is however, secured by all properties not otherwise pledged. In the case of bankruptcy debenture holders are considered general creditors.

The advantage of debentures to the issuer is they leave specific assets unencumbered, and thereby leave them open for subsequent financing.

Answer 2

Debentures are legal loan agreements generally made by publicly held corporations--commonly called bonds. They stipulate the value of each share--e.g. a $1mil total loan might issue 1000 bonds having a face value of $1000 each--plus the rate of interest to be paid and the date when the bonds (debt) matures or is redeemed. The holders of such bonds are in fact creditors of the corporation and have no equity interest in the firm. However, in case of default of payment they have a claim against the firm's assts ahead of the stockholders.

They are used as a source of capital for the firm without diluting the ownership--or selling more shares of stock. They are a fixed obligation (liability). Their value will fluctuate with the general interest rate changes (reverse association-interest rate up, bond value down and vice versa) as well as the financial health of the firm itself.

Answer 3

private company and public company have major diffences as concerned to a private company there has only 2 to 7 bod but in case of publiic coy it exceeds you just refer the text written by IM PANDEY about the coy