what is the difference between debenture and preference share
Answer Posted / avinash kunder (mumbai)
Debentures are debt security issued by companies, having a
certain MATURITY and bearing a stated COUPON RATE.
Debentures may be unsecured or secured by ASSETS such as
land and building of the issuing company. Debenture holders
have a prior claim on the earnings (coupon) and ASSETS in
the event of liquidation, as compared to PREFERENCE and
equity shareholders.
preference shares represent partial ownership in a company,
although preferred stock shareholders do not enjoy any of
the voting rights of common stockholders.The main benefit
to owning preference shares are that the investor has a
greater claim on the company's assets than common
stockholders Preferred shareholders always receive their
dividends first and, in the event the company goes bankrupt.
| Is This Answer Correct ? | 33 Yes | 4 No |
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