You are here

Advantages and disadvantages of Debentures

Check out Advantages and Disadvantages of Debentures discussed below. So let us find out some information on advantages and disadvantages to know more about debentures. The debentures which are generally issued by the corporations, are promises to pay specific amount of principal or money at a specified time or date over the particular course of the loan tenure, during which time interest is paid at a fixed rate on decided dates.

Advantages of Debentures :

Debentures is used to provide long terms funds to the company when needed.

Debenture holders usually do not have any rights of voting and hence debt financing does not result into dilution of control

Generally the rate of interest which is being paid to debentures is lower than the rate of interest which is paid on shares.

In case of debenture , it can be redeemed when the company has surplus funds.

Debentures are less costly, fixed payment on of interest and no ownership dilution.

Disadvantages of Debentures :

It becomes difficult for common people to buy debentures as they are of high denominations.

Problems such as cash outflows, financial risk, restricted convenants and obligatory payment is observed

Compared to stocks, the debentures are more secured but will lead to lower rate of theoretical return of funds.

Debenture holder are not consider the owners of the company.

Debenture Holder wil have no right to vote during the general meeting of the company

Generally debenture financing may enhance the financial risk

They have a fixed maturity hence the provision has to be made for the repayment

As debentures can be considered as one of the secure investment the returns are less.

During the tenure of debenture , payment of interest on debenture is mandatory and hence at times when company is making a low profits. Non payment of the interest can lead to bankruptchy of the firm or a company.

Explore more Information

WHAT OTHERS ARE READING

Process Validation Types Retrospective validation

Retrospective validation is the second type of process validation, some of the points regarding the retrospective validation are given below , so let us check it out one by one:

Retrospective validation is the documented evidence in which the process validation is carried out based on the historical data.

Validation of facilities, process, or processes are carried out based on the available historical data or reports.

This type of approach is rarely used today.

Medicinal Uses of Tulsi Plant in Points

Check out Medicinal Uses of Tulsi plant in Points which are discussed below. So let us find out some points on Medicinal uses to know more about Tulsi Plant.

Medicinal Uses of Tulsi Plant are :

Tulsi has ability to cure many types of fever because tulsi has very potent anti-bacterial, germicidal,antibiotic and fungicidal properties which are great for resolving fevers.

Tulsi plant is also helpful to enhance the immune power of the body.

Tulsi helps to maintain normal body temperature of the body.

Full Form of RTGS

RTGS Full Form - RTGS allows companies, individual or different firms to transfer amount from one account to another on the internet.

It is very fast method of transferring money from one account to another.

RTGS stands for Real Time Gross Settlement.

Full Form of DNB,MBBS

Diplomate of National Board  (DNB) is the title awarded by National board of examination.(Other full form and meaning of DNB are also available) So check it out other articles related to the given term.

MBBS ::Bachelor of Medicine, Bachelor of surgery (Degree awarded by medical school ).

PQ to SMF terms

The List of Abbreviations used in Pharmaceutical Industry

Check out more information of related terms

In Chapter number nine of the list of abbreviations used in pharmaceutical Industry you will get some of the other words used in pharma industry which are given below.

Full Form of NA

NA - Not Applicable

Other full form of NA are Nucleic Acid, North America,National Association and Sodium.

so let us find out other meaning of the given terms.

Check it out other similar terms on this site.