what is the difference between debenture and preference share
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Answer Posted / himanshu
The company can raise funds in different ways. Some of the
ways are:
1)Company Bonds- kind of a loan taken from investors. Bonds
have a validity, after which company has to repay the whole
principle amount.Investors have nothing to do with company
decision making.
2)Debentures- Almost same as bonds, but they dont have any
validity. Investors get the interest on their investment
like in case of Bonds.
3)Preferred Shares- These are preferred over equity shares
in case of dividend distribution as well as during
liquidation of the company.
4)Equity Shares- common shares that the peple can buy from
stock market. They are the most risky investment and last
one to get dividends.
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