What is a debenture? How does it differ from a share?

09 Apr 2024

Answer :

Word Count : 394

A debenture is a type of debt instrument issued by companies to raise capital. It is a long-term loan that the company borrows from investors, with the promise to pay them interest at a fixed rate and repay the principal amount on a specified date. Debentures are not secured by any specific assets of the company, making them unsecured loans.

On the other hand, a share represents ownership in a company. When an investor buys shares, they become a shareholder and part-owner of the company. Shares are equity instruments that entitle the holder to a claim on the ____ _________ ____ ___ ___ _________ _____ _______ _______ ___.
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