What are the differences between a shareholder and a debenture holder?

Question

The difference between a shareholder and a debenture holder are as follow:Basic of DifferenceShareholder&nbsp;Debenture...

Accepted Answer

The difference between a shareholder and a debenture holder are as follow:Basic of DifferenceShareholder&nbsp;Debenture...

Basic of Difference	Shareholder	Debenture holder
Ownership vs. Lending	Shareholders own a portion of the company and hold equity. This means they have a claim on the company’s profits and assets.	Debenture holders do not own any part of the company. They provide loans to the company in exchange for interest payments and eventual repayment of the principal amount.
Definition	A shareholder is a person who owns shares in a company and is a part-owner.	A debenture holder is a person who has lent money to a company by purchasing its debentures.
Return on Investment	Return on investment (ROI) is the broadest measure of profitability used by shareholders to gauge how efficiently and effectively the managers of the business are using their money.	Debenture holders receive fixed interest, regardless of company profits.
Risk Level	Shareholders face higher risk as their returns depend on company performance; they can earn high profits or lose their entire investment.	Debenture holders face lower risk, earning fixed interest payments and having a higher claim on assets in liquidation, though their returns are more stable but lower.
Type of Capital	Shares represent ownership capital.	Debentures represent borrowed capital.