23 June 2022 21:54

“Convertible -debt/note/bond/debentures” which of these are the same or different?

Is a convertible note the same as debenture?

This feature gives the bondholder some security that may offset some of the risks involved with investing in unsecured debt. A convertible debenture differs from convertible notes or convertible bonds, generally in that debentures have longer maturities.

What are convertible bonds and how are they different from other bonds?

A convertible bond pays fixed-income interest payments, but can be converted into a predetermined number of common stock shares. The conversion from the bond to stock happens at specific times during the bond’s life and is usually at the discretion of the bondholder.

What is the difference between Ncds and convertible debentures?

Convertible debentures are debentures that can be converted into equity of the company. In case of non-convertible debentures, they cannot be converted into equity shares of the company.

How does convertible debenture differ from non-convertible debenture explain with example?

Difference between Convertible Debentures and Non-Convertible Debentures. Non-convertible debentures have a fixed value and hence earn fixed returns when they mature. Convertible debentures have a lower rate of interest than non-convertible debentures since holders can convert them into equity shares.

What are the different types of debenture?

Types of Debenture

  • Secured and Unsecured: Secured debenture creates a charge on the assets of the company, thereby mortgaging the assets of the company. …
  • Registered and Bearer: A registered debenture is recorded in the register of debenture holders of the company. …
  • Convertible and Non-Convertible: …
  • First and Second:

What are debt convertible notes?

In the startup finance context, convertible notes are debt securities issued by startup companies to raise capital from investors. These investors generally expect their notes to convert into the companies’ equity securities in the future instead of receiving the return of their principal plus interest.

What are the similarities and differences between a \convertible preferred stock and convertible bonds?

At the end of the day, preferred stock is still equity, while convertible bonds are still debt. In other words, a company is not obligated to pay the preferred stock holders a dividend. However, preferred stock holders must be paid all their dividends before common stock holder receive a dividend.

What is a debenture bond?

A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.

How are the features of a convertible bond similar to both debt and equity?

It is a hybrid security that possesses features of both debt and equity. Similar to regular bonds, a convertible bond comes with a maturity date and pays interest to investors. In addition, if an investor decides not to convert their bonds to equity, they will receive the bond’s face value at the maturity.

What is the difference between bonds and debentures?

Bonds are debt financial instruments issued by large corporations, financial institutions and government agencies that are backed up by collaterals or physical assets. Debentures are debt financial instruments issued by private companies, but any collaterals or physical assets do not back them up.

What is the meaning of convertible debentures?

A convertible debenture is a long term debt instrument issued by a company that can be converted into equity shares after a specific period of time. They can be partially, fully or optionally convertible. These debentures are unsecured bonds as there is no primary collateral linked to them.

What is difference between share and debenture?

Shares are the company-owned capital. Debentures are the borrowed capital of the company. The person who holds the ownership of the shares is called as Shareholders. The person who holds the ownership of the Debentures is called as Debenture holders.

What are the different types of debentures in company law?

Debentures in company law may refer to secured debentures, unsecured debentures, registered debentures, bearer debentures, redeemable debentures, irredeemable debentures, and convertible debentures. Businesses usually raise capital by issuing shares in the company or by borrowing from lenders.

What are the different types of debentures Class 11?

Debentures – Meaning and Types

  • Secured and Unsecured Debentures. …
  • Redeemable and Irredeemable Debentures. …
  • Registered and Bearer Debentures. …
  • Convertible and Non-Convertible Debentures. …
  • First and Second Debentures. …
  • Zero Coupon and Specific rate debentures.

What is a debenture What are the different types of debentures discuss the protection afforded to debenture holders?

A debenture is like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company’s capital structure, it does not become share capital.

What is the difference between creditors and debentures?

Debenture holders are those who provides long term loan at specific interest rates & creditors are those who provides short term loan.

What is a debenture ‘? Discuss its nature scope and kinds of debentures?

Debenture is used to issue the loan by government and companies. The loan is issued at the fixed interest depending upon the reputation of the companies. When companies need to borrow some money to expand themselves they take the help of debentures. There are four different types of debentures.

What do you mean by debentures of a company also discuss the essential features of debentures?

A debenture is one of the capital market instruments which is used to raise medium or long term funds from public. A debenture is essentially a debt instrument that acknowledges a loan to the company and is executed under the common seal of the company.

What are debentures explain any four features of debentures?

If a company needs funds for extension and development purpose without increasing its share capital, it can borrow from the general public by issuing certificates for a fixed period of time and at a fixed rate of interest. Such a loan certificate is called a debenture.

What are the types of debentures also write advantages and disadvantages of debentures?

Advantages and disadvantages of Investing in a Debenture

Advantages Disadvantages
Debentures are debt instruments issued by the company that promises a fixed interest rate on the due date. The payment of interest and principal becomes a financial burden for the company in case of no profits.

What are two features of debenture?

Features of Debentures

  • Debentures are nothing but documents. …
  • These documents are evidence of debt. …
  • The interest on debentures is always payable at a fixed rate. …
  • The company may either repay the debt or even convert the debenture into shares or other debentures.

What is debenture discuss the different types of debenture answer the following question?

Debentures are mostly redeemable i.e. payable at the end of some fixed period, as mentioned on the debenture certificate. Repayment can be made at a fixed date at the end of a specific period or by installments during the lifetime of the company. The provision of repayment is normally made in a trust deed.

What are the features of bonds?

Some of the characteristics of bonds include their maturity, their coupon rate, their tax status, and their callability. Several types of risks associated with bonds include interest rate risk, credit/default risk, and prepayment risk. Most bonds come with ratings that describe their investment grade.