ZIMSEC O Level Commerce Notes: Differences between shares and debentures
|Capital contributed by shareholders||Loan capital|
|Shareholders are owners of the company||Debenture holders are creditors to the company|
|Dividends may fluctuate e.g. Ordinary share dividends||Interest is fixed|
|Earn dividends||Earn interest|
|Dividends are only paid when a profit has been made||Interest is paid whether or not profit has been made|
|Are not attached or secured against company assets||Can be secured against company assets.|
|Can be ordinary or preference shares||Can be mortgaged or naked.|
|Are a risky form of investment||Are a more secure form of investment|
|Cannot force a company into liquidation||Can force a company into liquidation|
|Ordinary shares have voting rights||All debentures have no voting rights.|
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