Debentures??#@! (1 Viewer)

[Cheezy-G]

What are debentures exactly? The text book definitions aren't exactly clear. And I need an informal definition of factoring

 

[sly fly]

Basically, debentures are loans granted to public companies by the general public. In order to ask for debentures, public companies need to issue a prospectus which is a fat book all bout the business and its future plans etc

 

[Pixydust*]

i debenture is simply a contract drawn up by a business (company) which sets out the conditions for a loan the company seeks to borrow. The company sets out the terms and also the interest rate on the debenture. It then becomes a tradeable financial asset. The interest payments are made regularly, and come the maturity of the debenture ( an expiry date), the full loan is repaid, or it can be 'rolled over'/ extended. The company will secure the debenture, (which is a form of debt financing of course!) with an asset they have. Debentures for different companies can be baught and sold through finance companies. Whoever holds the debenture at the end of the period (its long term by the way) will receive the loan repayment. Finance companies issue debentures. Hope this was helpful

 

[Korn]

What are debentures exactly? The text book definitions aren't exactly clear. And I need an informal definition of factoring

Factoring can be explained by using examples, for instace say u have a accounts receivable not due until a month from now, but u need cash sooner than that, u could go to a factoring firm (i cant remember the exact name of it) and they will give u cash now, but at a lower value then what ur accounts receivable is worth, and then they will collect the accounts receviable.
Debuntures are this

 

[Emily.]

you dont really need to know much about debentures. the textbook doesnt talk about it cos indepth knowledge isnt really required