Debenture Stock - An investment that is similar to preferred stock. The conditions and terms of debenture stock is the stock must comply under include a schedule for making payments to the investor or shareholder at regular quarterly intervals of a yearly cycle. The shareholder realizes the stock certificate treated as equity instead of an actual debt. This classification also establishes a degree of protection for the shareholders if the company closes its doors to begin the venture of liquidation. The investor receives one last scheduled payment after closing. The fixed payments relating to stock help ensure the investor will receive a steady return.