Advanced English Dialogue for Business – Debenture stock

Listen to a Business English Dialogue about Debenture stock

Adam: Hey Violet, have you heard of debenture stock?

Violet: No, what is it?

Adam: Debenture stock is a type of long-term debt instrument issued by a company that promises to repay the principal amount along with interest at a specified date in the future.

Violet: Oh, so it’s like a loan that investors provide to the company?

Adam: Exactly. Investors who purchase debenture stock are essentially lending money to the company and in return, they receive regular interest payments and the eventual repayment of the principal amount.

Violet: That sounds like a secure investment. Are there any risks associated with debenture stock?

Adam: Well, one risk is that if the company defaults on its payments, investors may not receive the interest payments or the repayment of the principal amount as promised.

Violet: I see. So, how do companies use the funds raised from issuing debenture stock?

Adam: Companies may use the funds raised from debenture stock to finance expansion projects, invest in new technology, or to meet other long-term financial needs.

Violet: Thanks for explaining, Adam. Debenture stock seems like an important financing option for companies.

Adam: No problem, Violet. It’s a way for companies to raise capital while providing investors with a fixed income stream.