This type of debt instrument is typically used by companies to raise funds without diluting ownership.
A debenture, in the world of finance, is a form of debt instrument that carries a redemption date. This date signifies the company's obligation to repay the principal amount to the holder of the debenture. It is a popular tool used by companies to generate capital without having to give up ownership. Essentially, it allows companies to borrow money from investors and repay it at a later date. This can be a useful strategy for companies looking to expand their operations or invest in new projects. So, in summary, a debenture is a crucial concept to understand when it comes to corporate finance.
