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Briefly explain the following source of finance: Debentures - Business Studies

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Question

Briefly explain the following source of finance:

Debentures

Answer in Brief

Solution

Debentures are debt instruments issued by companies to raise capital. Long-term borrowing for corporations involves investors lending money in exchange for recurring interest payments. Debenture investors have no ownership interests in the company but receive set interest payments and the principal amount upon maturity. Debentures are often secured by the company's assets, ensuring security for holders.

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