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:
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