Question

is issue of debenture is an

application of funds​

Answer 1

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What Is a Debenture?

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

KEY TAKEAWAYS

•A debenture is a type of debt instrument that is not backed by any collateral and usually has a term greater than 10 years.

•Debentures are backed only by the creditworthiness and reputation of the issuer.

•Both corporations and governments frequently issue debentures to raise capital or funds.

Answer 2

Debentures. Debentures generally have a more specific purpose than other bonds. While both are used to raise capital, debentures typically are issued to raise capital to meet the expenses of an upcoming project or to pay for a planned expansion in business.

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