DEBENTURE STOCK Meaning and
Definition
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Debenture stock is a type of security that represents a long-term loan issued by a company or government entity to raise capital. It is classified as a debt instrument, similar to bonds, and is traded in the financial markets.
In simple terms, debenture stock is a form of borrowing for the issuing company or government, with investors purchasing the debentures as a means of lending money. The stock refers to the fact that the debentures are typically issued in large quantities, creating a pool of stock that can be bought and sold on the open market.
Debenture stockholders, also known as debenture holders, are considered creditors of the issuing entity. They have a claim on the company's assets and are entitled to receive fixed interest payments over the life of the debenture. These interest payments are usually paid semi-annually or annually and are generally at a fixed rate.
Unlike equity shareholders, debenture stockholders do not have any ownership or voting rights in the company. They are primarily concerned with the repayment of interest and the return of principal at maturity. If the issuing entity defaults on the interest payments or the principal, debenture stockholders may have the right to take legal action to recover their investment.
Overall, debenture stock provides a way for companies and governments to raise long-term capital by borrowing money from investors, while offering a fixed return on investment to the debenture holders.
Common Misspellings for DEBENTURE STOCK
- sebenture stock
- xebenture stock
- cebenture stock
- febenture stock
- rebenture stock
- eebenture stock
- dwbenture stock
- dsbenture stock
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- drbenture stock
- d4benture stock
- d3benture stock
- deventure stock
- denenture stock
- dehenture stock
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- debwnture stock
- debsnture stock
- debdnture stock
- debrnture stock
Etymology of DEBENTURE STOCK
The word "debenture" comes from the Latin word "debentur", which means "they are owed". In finance, a debenture is a type of bond or debt instrument that represents a long-term loan issued by a company or government to raise capital. The term "stock" refers to shares or ownership in a company. "Debenture stock" is a combination of these two concepts, representing a form of long-term debt capital that is repayable at a fixed date, but also carries some characteristics of equity ownership, such as paying dividends.
