Difference between Stocks and Bonds

Distinguish, differentiate, compare and explain what is the difference between Stocks and Bonds. Comparison and Differences.

Differences between Stocks and Bonds

S.No. Basis of difference Stocks Bonds
1 Meaning An Equity Instrument representing an ownership interest in a corporation. A Debt Instrument with a promise to pay back the principal amount with interest.
2 Who Are the Issuers? Corporates Government Institutions, Financial Institutions, Companies etc.
3 Major Risks Associated Market Risk, Business Risk. Interest Rate Risk, Inflation Risk.
4 Status of Holders Shareholders are the owners of the company. Bondholders are the lenders to the company.
5 Risk Level High since it depends upon the performance of the issuer so no guaranteed returns. Relatively low since bondholders are prioritized for repayments.
6 Additional Benefit Shareholders get the right to vote. Bondholders get the preference in terms of Repayment and also on liquidation.
7 Form of Returns Profits earned by the company are paid in the form of Dividends. Interest payments are made in the form of Coupon Payments.


Difference between Bonds vs Stocks

Stocks vs Bonds

Differences between Bonds vs Stocks

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