Question on: SS1 Economics - Meaning And Types of Shares, Debenture And Other Securities
What are debentures, and how do they differ from shares?
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Debentures are a type of debt instrument that companies use to raise capital. When a company issues debentures, they are borrowing money from investors, and they promise to repay the principal and interest at a specified time in the future. Debenture holders do not have any ownership rights in the company, unlike shareholders who own a portion of the company.
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