Question

Shareholder and Debentures holder

 

Answer 1

Points	Shareholder	Debentureholder
1. Meaning	A Companies owned capital which is spilt into large number of equal parts each such part is called as shares.	Debenture is an acknowledgement of debt. It is a source of borrowed capital.
2. Return on investment	Monetary return on shares is called as dividend and it is paid at fluctuating rate.	Monetary return on debentures is called as interest and it is paid at a fixed rate.
3. Voting rights	The Shareholders have voting rights through which they can participate in the management.	The Debenture holders do not enjoy normal voting rights, except on those matters which affect their interest
4. Status of holder	The shareholders are the owners  of the company.	Debenture holders are the  Creditors of the company.
5. Redemption	Equity shares are not redeemed throughout 7 the life of the company.	Redeemable debentures are paid back after its maturity.
6. Priority claims	Shareholders do not have any priority while receiving return on investment or return of capital.	Debenture holders have prior claims for repayment of capital and for receiving interest on their investments.
7. Market Value	Market values of the shares keep changing as per the financial condition of the company.	Market value of the debentures remains constant.
8. Security offered	No security is offered for investing money in share capital.	Company can offer any asset as a security to debenture holders.