Debentures: meaning, definitions and examples

Etymology

• The term comes from the Latin word 'debentur,' meaning 'they owe.'
• The word relates to the idea of owing money and has been used since the 16th century.

Finance

• Debentures are often used by companies to raise funds without giving up ownership.
• They typically come with fixed interest rates, which means you know exactly how much you'll earn over time.

Legal Aspects

• Debentures are legally binding agreements, similar to a contract, outlining the terms of borrowing and repayment.
• They can be secured, backed by assets, or unsecured, based solely on the company's creditworthiness.

History

• Debentures played a significant role in the industrial revolution, helping many companies fund their expansions.
• The use of debentures has evolved, with various structures now existing to meet diverse investment needs.

Investment Strategy

• Investors may choose debentures for their typically lower risk compared to stocks.
• They can also provide a steady income stream, making them popular among retirees and conservative investors.

Ranked #10,216, this word falls into high-advanced vocabulary. It appears less frequently but is valuable for expressing precise meanings in specific contexts.

• ...
• 10213 tangent
• 10214 retailer
• 10215 obesity
• 10216 debentures
• 10217 operatives
• 10218 attentive
• 10219 impart
• ...