What do debenture holders receive as return on investment?

What do debenture receive as return on investment?

A debenture pays a regular interest rate or coupon rate return to investors. Convertible debentures can be converted to equity shares after a specified period, making them more appealing to investors. In the event of a corporation’s bankruptcy, the debenture is paid before common stock shareholders.

What does a debenture holder receive?

Debenture holders will be paid before preferred shareholders but may be subordinate to other types of debt on the company’s books such as senior loans. If the funds allow, a debenture holder may receive their full repayment of the bond’s principal with interest.

What is the return on investment on debenture answer in one sentence?

Textbook solution

Interest is the return on investment for a debenture. The interest rate is fixed at the issue of debenture. This interest must be paid by the company even when the company has no profit.

What does debenture holders get in return of their dept in company?

Companies repay the borrowings at a fixed rate of interest to the debenture holders. Shareholders get a return by dividend payment. In case of debentures, the holders get interest regardless of the profit of the company.

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What are debenture holders?

A debenture is a way that larger, public limited companies might borrow money at a fixed rate of interest. The company borrows money from the lender, who’s then called a “debenture holder”. … Unlike shareholders, debenture holders can’t vote at companies’ general meetings.

What is the status of debenture holder?

What is the status of a debenture holder ? A debenture holder is considered as the creditor of the company.

What is shareholder and debenture holder?

A person having the debentures is called debenture holder whereas a person holding the shares is called shareholder. A shareholder subscribes to the shares of a company. … Debentures are part of loan. A shareholder or member is the joint owner of a company; but a debenture holder is only a creditor of the company.

What are the rights of shareholders and debenture holders?

1. The shareholders have the right to control and interference in the company’s affairs. … The shareholders are entitled to get dividends only out of profit. The debenture holders are entitled to a fixed rate of interest, whether the company runs on profit or loss.

What are the debenture holders of the company called?

“Debenture holders of a company are called creditors of the company. Debenture is a kind of long term loan that a company takes in return for a fixed rate of interest.

Who is debenture holder answer in one sentence?

Ans: Debenture holders are the creditors of the company. 2.

Are debenture holders creditors?

A person having the debentures is called debenture holder whereas a person holding the shares is called shareholder. A shareholder or member is the joint owner of a company; but a debenture holder is only a creditor of the company.

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What is convertible debentures answer in one sentence?

=) ‘Convertible debenture’ is a debt security than can be converted into stock or equity shares . A convertible debenture is a kind of advance issued by an organization that can be changed over into stock.