debenture

Vocabulary Word

Definition

A 'debenture' is basically a loan certificate issued by a company, with a promise to pay back the loan sometime in the future with interest. It's a way businesses raise money for different activities.

Examples in Different Contexts

In corporate finance, a 'debenture' serves as a tool for companies to raise capital. A CFO might comment, 'We're issuing debentures to fund our new infrastructure projects.'

Practice Scenarios

Startup

Scenario:

We've made strides in our product development, but the next phase requires substantial investment. We should explore various funding methods.

Response:

Issuing convertible debentures sounds like a flexible choice that might appeal to potential investors.

Business

Scenario:

We're in a position where we need to raise a significant amount of funds for our new project. What's your take on floating debentures?

Response:

I think issuing debentures could be a viable option for raising the necessary funds, provided we can manage the interest expense.