Ownership vs. creditorship — who has more say in management? In corporate finance terms, who typically has greater say in company management decisions: a shareholder (equity holder) or a debenture holder (creditor)?

Introduction / Context:
Chemical plants are financed by a mix of equity and debt. Understanding the roles of shareholders versus debenture holders clarifies who directs management and strategy and who primarily receives contractual interest payments with protective covenants.

Given Data / Assumptions:

• Shareholders are owners with voting rights.
• Debenture holders are creditors with interest and principal claims.
• Typical corporate governance rules apply (ordinary shares vote; debentures do not).

Concept / Approach:
Equity confers residual ownership and, with it, voting rights for electing directors and approving major corporate actions. Debenture holders usually lack voting rights in ordinary business matters; they possess contractual protections (indentures, covenants) and can enforce remedies upon default. Hence, in day-to-day management influence, shareholders have more say than debenture holders.

Step-by-Step Solution:

Verification / Alternative check:
Company law and articles of association generally grant one-share-one-vote (subject to class differences). Debenture contracts specify rights only upon breach or special restructuring.

Why Other Options Are Wrong:

Common Pitfalls:
Confusing protective covenants with managerial control; creditors influence terms but do not typically manage operations unless in distress.

Final Answer:
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