Question

Write any four differences between Share and Debenture.

Hint:

Share = Ownership, Debenture = Loan to the company.

Answer 1

A shareholder is the owner of the company, whereas a debenture holder is a creditor of the company.
Dividend on shares is paid only out of profits, whereas interest on debentures is paid even if there is no profit.
Shares do not have a fixed rate of return, whereas debentures carry a fixed rate of interest.
Shares are not repayable during the lifetime of the company, whereas debentures are repayable after a fixed period.