The entitlement of a debenture holder from a company's income is known as

The entitlement of a debenture holder from a company's income is known as interest. Debentures are long-term debt instruments issued by companies to raise funds from the public. When an investor buys a debenture, they become a creditor to the company and are entitled to receive a fixed rate of interest on their investment. The interest paid to debenture holders is a percentage of the face value of the debenture and is usually paid at regular intervals, such as annually or semi-annually. The company's obligation to pay interest to debenture holders is a legal liability, and failure to pay interest can lead to legal action against the company. Unlike dividends, which are a share in the company's profits, interest is a fixed payment that is not linked to the company's performance. Therefore, the entitlement of a debenture holder from a company's income is known as interest.