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A type of stock that makes fixed payments at scheduled intervals of time. Debenture stock differs from a debenture in that it has the status of equity, not debt, in liquidation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A stock entitling the bearer to a certain fixed dividend at set periods of time. Like debenture debt, debenture stock offers fixed payments with no collateral beyond the company's performance. Unlike debenture debt, however, debenture stock is a form of equity, which puts it in a position behind all debts in the event of liquidation. Debenture stock operates almost identically to preferred stock.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved