Financial Capital - Differences Between Shares and Debentures

Differences Between Shares and Debentures

  • Shareholders are effectively owners; debenture-holders are creditors.
  • Shareholders may vote at AGMs (Annual General Meetings) and be elected as directors; debenture-holders may not vote at AGMs or be elected as directors.
  • Shareholders receive profit in the form of dividends; debenture-holders receive a fixed rate of interest.
  • If there is no profit, the shareholder does not receive a dividend; interest is paid to debenture-holders regardless of whether or not a profit has been made.
  • In case of dissolution of firms debenture holders are paid first as compared to shareholder.

Read more about this topic:  Financial Capital

Famous quotes containing the words differences and/or shares:

    “I trust the time is nigh when, with the universal assent of civilized people, all international differences shall be determined without resort to arms by the benignant processes of civilization.”
    —Chester A. Arthur (1829–1886)

    “If a dog doesn’t put you first where are you both? In what relation? A dog needs God. It lives by your glances, your wishes. It even shares your humour. This happens about the fifth year. If it doesn’t happen you are only keeping an animal.”
    —Enid Bagnold (1889–1981)