Shares and debenture

• FA18-BBA-019: Alina Azhar

• FA20-BAF-095: Ume Habiba
• SP20-BBA-097: Zobia Zahid
• SP20-BBA-128: Musfira Fawad
 Shares and debentures
Shares Debentures
• Meaning : • Meaning :
Shares means a share in the share capital An unsecured loan certificate issued by a
of a company. company.
Definition: Definition:
“The capital of a company is divided “Debentures are the debt
into shares. Each share forms a unit of instruments used by companies and
ownership of a company and is offered government to issue the loan.”
for sale so as to raise capital for the
company.’’
Simple words: Simple words:
In the simple words, shares are the In the simple words, debentures are
company owned capital. the borrowed capital.
 SHARE AND DEBENTURE
Shares Debentures

Holder: Holder:
The person who hold the The person who hold the ownership
ownership of shares called of the debentures called
shareholders. Debentures holders.

Status:
Status:
Debenturs crediors
Share owners
Return:
Return: Debentures holders are the given
Shareholders are given dividend intrests.
 SHARE AND DEBENTURE
Shares Debentures

Voting Right: • Voting Right:

Shareholders posses voting Debenture holders do not
rights. posses voting rights.

Trust Deed: Trust Deed:

No carried out Carried out

Conversion : Conversion :
Can not be converted into shares Can be converted into shares
easily easily.
 DEBENTURES
• In corporate finance, a debenture is a medium- to long-
term debt instrument used by large companies to borrow
money, at a fixed rate of interest.

1) Companies used the debentures for raising the long term finance.
2) Debentures holdres are called the creditors of the company.
3) Debentures holders are paid a fixed amount intarest.
Features of the Debentures
Borrowed
Fund
No voting Fixed rate
right of interest

Redeemabl
e Security
 Features of the Debentures

Borrowed Fund :
Debentures of the part of the borrowed fund capital and debentures holders are the
creditors of the company.
Fixed rate of intrest:
Company has the legal obligation to pay regular and the fixed to its debentures
holders even if there is intrest.
Security:
They generally debentures are issued against charge of fixed assets of the company.
Redeemable/ Paid back:
Debentures are the redeemable or paid back on expiry of fixed period of the time.
No voting right:
They can not participate in the management.
TYPES OF DEBENTURES