Question

What is a Debenture?

Answer 1

The term ‘debenture’ has come from the Latin word ‘debare’, which means to ‘owe.’ Debentures play a significant role in the financial structure of companies. It’s one of the main sources for companies to raise debt capital to meet their long-term financial needs. Debentures represent borrowed capital. The debenture holders are creditors of the company. The debenture holder gets a fixed rate of interest as a return on his investment.