Debt Instrument 

DEBENTURE

PART -2

DEBENTURE

PART -1

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 different types of debentures

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6. Non – Redeemable Debentures  

– These are the debentures which cannot be redeemed in a company’s lifetime. They are only paid back on the company’s liquidation.

Part: 1-5 

7. Convertible            Debentures 

– These are the debentures which can be converted into the equity shares of the company. 

Part: 1-5 

8. Non – Convertible       Debentures 

– These cannot be converted into the equity shares of the company.

Part: 1-5 

The Advantages of Debentures 

The owners do not have to dilute their equity. 

It is a good source of finance as the finance is taken from the people at large but needs to be returned after a specific time along with the interest over the years.

The Advantages of Debentures 

They can be converted in to equity shares of the company as well, if the company wants to become an investor than being a creditor of the company. 

In an event of company’s liquidation, the debenture holders are paid first then the equity shareholders of the company. 

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