What is share vs debentures

Question

Accepted Answer

Shares represent ownership in a company while debentures are a type of debt instrument issued by a company.

Shares represent ownership in a company and give the shareholder voting rights and a share in the profits.
Debentures are a type of debt instrument issued by a company and pay a fixed rate of interest to the debenture holder.
Shares are generally considered riskier than debentures as the value of shares can fluctuate greatly based on market conditions.
Debentures are generally considered less risky than shares as they offer a fixed rate of return.
Companies can issue both shares and debentures to raise capital.
Shareholders have the potential to earn higher returns than debenture holders, but also face the risk of losing their investment if the company performs poorly.
Debenture holders have a lower risk of losing their investment, but also have a lower potential for returns compared to shareholders.

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