A bond acknowledging a loan to a company under the company's seal, bearing a fixed rate of interest is known as
Question 1 Report
A bond acknowledging a loan to a company under the company's seal, bearing a fixed rate of interest is known as
Answer Details
A bond acknowledging a loan to a company under the company's seal, bearing a fixed rate of interest is known as a debenture. A debenture is a type of long-term debt instrument issued by companies, which is backed by the issuer's reputation and creditworthiness. It is a bond that provides investors with a fixed rate of return and is generally unsecured, meaning there is no collateral attached to it. Debentures are typically issued with a fixed interest rate, which is paid out to investors on a regular basis until the bond reaches maturity. At maturity, the principal amount of the debenture is repaid to the investor.
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