what are 5 major differences between stocks and bonds?
Bonds | Stocks | |
Interest payment | Bonds pay a fixed interest payment at regular intervals | Stocks do not pay a fixed interest, they pay a dividend whenever declared by the company. |
Period of maturity | Bonds mature after their stated period expires, they can be issued until a term of 30 years | Stocks do not have a period of maturity, they have a perpetual existence like the company. |
Form of capital | Bonds are a part of debt capital | Stocks are a part of equity capital |
Treatment upon winding up | Bond holders are given priority over stock holders in case of winding up, since they are a form of creditors. | Stockholders are the last ones to receive any proceeds of winding up. |
Market | They are traded over the counter | They are traded in stock exchanges. |
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