What are equity, bonds and debentures?27 Apr 2011 Share on:
You gave me 100 Rs and I gave you a paper writing" I'll pay back 120 Rs. after 1 year"
This paper is bond.
You give me 100 Rs. and I gave you a paper "this gives you a partnership of 100 Rs. in my company, I'll share profit with you accordingly."
This is equity /share. Here the you get a share in the profit only if my company makes profit.
But if you give me 100 Rs. and I gave you a paper writing "I'm gonna pay Rs.15 per year no matter how much profit or loss I make in my company"
This is debenture.
##As described by Mrunal