What is the difference between a share and a bond?

A share and a bond are two different types of investments that a person can make. Shares refer to a portion of the ownership of a company. When you buy a share of a company, you become a shareholder, which gives you certain rights and responsibilities, such as voting on important decisions that will affect the company and receiving dividends if the company is profitable. Bonds, on the other hand, are a type of loan. When a company issues a bond, it is essentially borrowing money from the investor. The investor receives interest on the bonds that can be paid out either periodically (known as coupon payments) or when the bond matures. Bonds also provide the company with access to money that it can use for expansion or other business-related purposes. In short, shares give you a portion of the ownership of a company while bonds give you a loan to the company. While both investments come with risks, they also have the potential to bring you returns. So, if you are considering investing in either one, it is important to weigh your options carefully and make sure that you understand both of these types of investments before putting your money in them.

Related FAQs

What laws govern the formation of a company?
What is the law on intellectual property?
What is the process for setting up a joint venture?
What procedures must be followed when bringing legal action against a company?
What type of legal matters fall under the umbrella of commercial law?
How does the law protect minority stakeholders?
What are the consequences of insolvency?
What is the definition of professional negligence?
What laws govern the issuance of securities?
What is the law on anti-money laundering?

What is the difference between a share and a bond?

Related FAQs

Related Blog Posts