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eMusic Study Pack • Government
Student
📖 Comprehensive Note
Debenture is a type of long-term security acknowledging a loan made to a company, usually under the company’s seal and carrying a fixed rate of interest. It provides security for the repayment of the principal and payment of interest.
- Issuer: Usually a company or corporation.
- Holder: The investor or lender who receives interest.
- Security: May be secured or unsecured against company assets.
- Interest: Fixed and payable at regular intervals.
Debentures are a major source of long-term financing in commerce and corporate management.
🎤 Lyrics + Audio
A debenture is a bond
Acknowledging a loan
Generally under the company's seal
And bearing a fixed rate of interest
And usually giving security
For the repayment of the loan
And the payment of the interest
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📊 Line-by-Line Study Guide
| Lyric Line | Explanation |
|---|---|
| A debenture is a bond acknowledging a loan | It represents money borrowed by a company from investors. |
| Generally under the company’s seal | Official company authorization and legal recognition are required. |
| Bearing a fixed rate of interest | Debentures promise regular, predetermined interest payments. |
| Usually giving security for repayment | Often secured by company assets to ensure repayment safety. |
💡 Mnemonic
"Big Loans Securely Issued Regularly" — reminds you that debentures are bonds acknowledging loans, often secured and paying interest regularly.
❓ Quiz
1. A debenture represents what?
2. A debenture carries what type of interest?
3. Debentures are issued under what?
🃏 Flashcards
Q1: What is a debenture?
A bond acknowledging a loan with a fixed interest rate issued under a company’s seal.
Q2: Who issues debentures?
Companies and corporations seeking long-term finance.
Q3: What kind of interest do debentures carry?
Fixed rate of interest.
🎯 Drag & Drop
Drag each statement into the correct category.
Definition
Features
A debenture is a bond
Acknowledging a loan
Generally under the company's seal
Bearing a fixed rate of interest
Usually giving security
For the repayment of the loan
And the payment of the interest
📌 Summary
- A debenture is a bond acknowledging a company’s loan.
- It is issued under the company’s seal.
- It carries a fixed interest rate.
- It often includes security for repayment.