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    Question

    What is the main difference between equity shares and

    debentures?
    A Equity shares carry a fixed interest rate, while debentures have fluctuating dividends Correct Answer Incorrect Answer
    B Equity shares represent ownership, while debentures represent a loan to the company Correct Answer Incorrect Answer
    C Debenture holders are entitled to share profits, while equity shareholders only receive interest Correct Answer Incorrect Answer
    D Equity shares are repayable at a fixed date, while debentures do not have any redemption date Correct Answer Incorrect Answer
    E Debenture holders have voting rights, while equity shareholders are considered creditors Correct Answer Incorrect Answer

    Solution

    • Equity Shares represent ownership in a company and provide voting rights in decisions such as elections of the board of directors. • Debentures are a form of loan taken by the company from investors, offering fixed interest but no voting rights. They are creditors, not owners of the company.

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