Week 13 - Shareholder v Debenture holder

Question 1

Role

Answer 1

Shareholder - member of company
Debenture - creditor of company

Question 2

Voting rights

Answer 2

Shareholder - may vote
Debenture - may not vote

Question 3

Cost of investment

Answer 3

Shareholder - Shares may not be issued at a discount
Debenture - Debentures may be offered at a discount

Question 4

Return

Answer 4

Shareholder - Dividends only paid out of distributable profits
Debenture - Interest must be paid when due

Question 5

Redemption

Answer 5

Shareholder - Statutory restrictions on redeeming shares
Debenture - No restrictions

Question 6

Liquidation

Answer 6

Shareholder - Last to be paid in a winding up
Debenture - Paid back before shareholders