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Who decides rate of interest for debentures?
Company decides the rate of interest for debentures where debenture is just a simple document which is used to create either debt or acknowledge the debt. When the company issues it then it does it in the form of a certificate which acknowledge's indebtedness. The debentures are issued to the lenders under the Company's Common Seal and against the charge on the assets of the Company. Whoever holds the debentures doesn't have the right to hold the meeting with the company. The rate of interest with which the debentures gets issued are called as coupon rate.
They are of two types:
- Fixed Rate
- Floating rate of interest are in accordance with the rate of bank and reward of risk.
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