Saturday, 20 May 2017

8 Difference Between Stock And Bond

1. Stocks, or shares of stock, represent an ownership interest in a corporation. Bonds are a form of long-term debt in which the issuing corporation promises to pay the principal amount at a specific date.
2. Bonds are less risky than stocks.
3. Stocks pay dividends to the owners.
Bonds pay interest to the bondholders.
4. Bonds are issued by public sector authorities, credit institutions, companies and supranational institutions.
Stock are issued by corporation or joint-stock companies.
5. Is the return guaranteed?
Stock:
No
Bond:
Yes
6. Stockholders are the owners of the company.
Bondholders are the lenders to the company.
7. Add on benefits
Stock:
The holders get voting rights.
Bond:
The holders get preference at the time of repayment.
8. Bonds markets, unlike stock or share markets, often do not have a centralized exchange or trading system.
Stock or share markets, have a centralized exchange or trading system.


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