Q.Debenture holders are entitled to a fixed rate of ______.

Debentures are certificates acknowledging a loan taken by a company, carrying a fixed rate of interest that must be paid whether or not the company is profitable, and a promise to repay the principal on a fixed redemption date; debenture holders are creditors, not owners, so they get no voting rights and no share in profits beyond the promised interest, though a secured debenture gives them a specific charge on company assets as backing if the company defaults. Loans from commercial banks and financial institutions serve a similar purpose for firms that may not wish to, or cannot, access the public debenture market — these loans, whether for working capital (like cash credit/overdraft) or for fixed assets (term loans), are usually secured and carry interest tied to the borrower's c …