Practicing Success
Practicing Success
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| Debenture holders are considered as __________________. |
Debtors of the Company Creditors of the Company Owners of the Company Shareholders of the company |
| Creditors of the Company |
| Debenture holders are indeed considered as creditors of the company. When a company issues debentures, it is essentially borrowing money from investors who purchase those debentures. These investors become creditors of the company because the company owes them the principal amount of the debentures, as well as any accrued interest. In the event of the company's insolvency or liquidation, debenture holders have a prior claim on the company's assets, particularly for the repayment of the principal amount and any outstanding interest. They are treated as secured or unsecured creditors, depending on whether the debentures are secured by specific assets or are unsecured (also known as "unsecured debentures"). |
