Hello

I like to know the What is Debentures, Equity Shares and dividend . Can any one give simple explanation on this. Why the companies are going for this.

Thank you

veearrgee

Debenture is a debt instrument carrying a fixed rate of interest.A co. can borrow money by issuing debentures. A co. can satisfy its long term financial needs by issuing debentures.In consideration the co. has to pay a fixed rate of interest annully or half yearly.It is less risky and hence rate of return is low.

Equity shares are those shares through which a co. can raised capital from the capital market.The basic difference between equity and debentures are that equity shareholders are the owner of the co. while debentureholders are the creditors of the co.

Dividend is the distribution of profits earned by the co. to its shareholder .Only equity shareholder & preference shareholder r entitled 2 received dividend.