Which of the following accurately describes a debenture?
A)A bond with specific assets pledged as collateral.
B)A type of bond issued in the names and addresses of the bondholders.
C)A type of bond which requires the bond issuer to create a sinking fund of assets set aside at specified amounts and dates to repay the bonds.
D)A type of bond which is not collateralized but backed only by the issuer's general credit standing.
E)A type of bond that can be exchanged for a fixed number of shares of the issuing corporation's common stock.

Question

Quizplus · Accepted Answer

A debenture is a type of bond that is not secured by any specific collateral, but relies solely on the creditworthiness of the issuer. This means that if the issuer defaults on the bond, bondholders would not have any assets to claim as repayment.

Which of the Following Accurately Describes a Debenture