When the capital of the company is not sufficient to carry on business the company raise loan by issuing what is known as debenture debenture holder money treated as a loan whereas preference shareholder money treated as a capital of the company. Debenture holder is not a properitor of the company in the contest preference share holder is a properitor of the company. Preference share holder has a right to get bonus or dividend from the company but debenture holder has no right to get dividend. Source: CoolInterview.com
If you have the better answer, then send it to us. We will display your answer after the approval.
Rules to Post Answers in CoolInterview.com:-
There should not be any Spelling Mistakes.
There should not be any Gramatical Errors.
Answers must not contain any bad words.
Answers should not be the repeat of same answer, already approved.