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
| Shares | 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 |
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