Debentures are commonly issued by small companies.
Since debentures are unsecured, investors look to the good faith and credit of the issuing corporation, therefore larger firms with high recognition are more likely to issue debentures.

Question

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Debentures are typically issued by larger and more established companies with a strong credit rating because they are unsecured and investors rely on the creditworthiness of the issuing corporation. Small companies may have a harder time issuing debentures due to their lack of recognition and creditworthiness.

Debentures Are Commonly Issued by Small Companies