Companies sometimes need to borrow money from the public to get ahead with their ongoing projects. In such situations, they may issue debenture to accumulate capital. As such, a debenture is a financial instrument mostly used by medium to large companies in order to borrow money from the investors on a long-term basis. Students of finance and accounts are given in-depth knowledge on the subject because issuing debenture is a complicated process for the companies. It also involves specific rules and regulations laid down by certain laws of a country. Students are also given assignment writing or homework on this subject which sometimes seem too hard to complete. In such circumstances, it is always feasible to contact BookMyEssay for help from finance assignment writing experts. This organization specializes in finance and accounting assignment helps and debenture assignment help is a part of it.
A debenture is a long-term debt bond that is normally issued by a company with an intention to accumulate investment or capital for a specific purpose. Most debentures give a fixed rate of interest to the debenture holders. A company needs to pay that interest prior to announcing dividends for the shareholders. Furthermore, debentures could only be issued against available assets of the company. As such, debentures are secured financial instruments, because if a company fails to pay to their debenture holders, then their assets could be sold by the appropriate authority to pay back amounts borrowed from the debenture holders. Again, in some countries unsecured debentures are also issued by the companies, like in the USA, most of the debentures issued by the companies are unsecured in nature. Unlike, secured debentures, unsecured debenture holders don’t get any priority in case the company goes on bankruptcy. They are treated as any other creditors of the company.
Debentures are advantageous for both a company and their investors. From a company’s perspective, interest paid against debentures is normally much lower than the interest they need to pay against bank overdrafts or loans taken from a bank. Also, issuing and managing debentures and debenture holders are easier than keeping updates regarding various banking affairs.
From an investors perspective, debentures are more attractive than fixed deposits of the banks because these offer higher interest rates than banking interests. Moreover, debentures are easy to transfer or liquefy in stock exchanges than fixed deposits offered by the banks.
Basically, there are two types of debentures – convertible and non-convertible.
Convertible debentures reduce the risk involved in investing money in a project, as they are strongly backed by the company’s assets. Convertible debentures are better option for the investors, because if the market goes volatile, convertible debentures are safer when compared with non- convertible debentures.
In all countries, where debentures are allowed, issuance, liquidity, transfer, maturity and many other aspects related to debentures are ruled by certain laws. In most of the countries, the rules are mentioned in the company laws. Also, companies and even government agencies need to take permission from the appropriate authorities before floating their debentures. Thus, companies can’t fix their rules whimsically. In different countries stringency of laws regarding debentures varies –
It is obvious from the above discussion that debenture as a subject is a complicated one. It involves certain laws and then certain accounting procedures. The companies issuing debentures also need to abide certain rules regarding the issuance of debentures and managing debentures accounts. Thus, the students need to keep in mind lot of things while completing assignments on debentures.
BookMyEssay employs only those writers who understand the subject from the core. These writers, are well qualified people having years of experience in preparing debenture accounts in various companies and also handling various debenture related issues. Hence, they are the most suitable experts to help with debenture assignment writing for students who are struggling hard with their debenture related assignments.
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