Unlike shares, debentures do not confer ownership or voting rights to buyers. This is because debentures are issued solely to borrow money from debt markets and not to increase the number of shareholders. However, some debentures can be converted into shares.
Issuers typically pay interest during the lifetime of the debenture, while the principal is paid on maturity. In the United States, debentures are analogous to unsecured bonds and are backed solely by the creditworthiness of the issuer, according to Wikipedia. However, in countries such as the United Kingdom, debentures tend to be secured. Some types of debentures, referred to as convertible debentures, can be exchanged for shares of the issuing corporation. However, standard debentures are typically nonconvertible.
Unlike debentures, shares allow buyers to own part of the issuing corporation, determine the composition of a company's board of directors and get dividends. There are several types of shares, explains the Australian Securities Exchange. Ordinary shares have no atypical rights. They allow owners to share in dividends and grant them the right to vote during general meetings. Preference shares grant buyers a mix of special rights and restrictions. For instance, voting rights may be limited to certain periods of time or select circumstances.Learn More
There is no way of knowing in advance when a stock split of Exxon Mobil may occur. Publicly traded companies have a finite number of shares of stock available on the stock market, according to Investopedia. Stocks split when a corporation's board of directors determines that additional shares are needed.Full Answer >
Stocks are publicly traded shares of ownership in a company that can be bought and sold by investors like any other commodity. Holding shares in a company entitles the holder to a share of the profits, voting rights in how the company is run and, potentially, a profit when the shares are later sold.Full Answer >
Savings bonds mature at the end of the loan period, which has a limit of 30 years, according to the U.S. Department of Treasury. Investors are also able to redeem the bond's face value plus any earned interest 12 months after purchase.Full Answer >
Despite their benefits, preference shares are limited because of their callable status. The payouts associated with preference shares are based on the discretion of the underlying company. Companies therefore can repurchase preference shares from their holders when interest rates decrease. In addition to their callable status, preference shares are not as transparent as other investment types. Preference shares do not have specific maturity dates or ratings.Full Answer >