Question

What is the difference between debentures and equity?

• A. Debentures are sealed bonds acknowledging that money has been borrowed; equity is a shareholder’s share voting rights in proportion to his shareholding
• B. An equity shareholder cannot withdraw his amount whereas debentures can be withdrawn by taking back the amount
• C. Equity shareholding is more risky compared to debentures, which are bound to return good interests on the principle
• D. Both debenture and equity holders have the right of voting irrespective of the proportion of holding’s but debentures of a lower value than equity

Answer 1

The correct option is D

Both debenture and equity holders have the right of voting irrespective of the proportion of holding’s but debentures of a lower value than equity

The difference between Equity shares and Debentures is given below in tabular form: