Shares and debentures are two of the most popular financial instruments used by corporations. Both offer investors the opportunity to invest in a company, but they differ in terms of their characteristics, rights and obligations. This article will discuss the differences between shares and debentures.
About Difference Between Shares And Debentures
|Equity instruments of a company||Debt instruments of a company|
|Owners are shareholders||Creditors are debenture holders|
|Risk is higher||Risk is lower|
|No fixed rate of return||Fixed rate of return|
|Not secured by collateral||Secured by assets of the company|
|Dividends paid out of profits||Interest payments made from income|