Analyze the difference of stock and bonds

Stocks and bonds are investment tools that can generate wealth. Both are sometimes considered to be the same. In fact, there is no difference at all. But actually, stocks and bonds have significant differences. To that end, let’s try to peel the difference in stocks and bonds to expand insight will be two means this investment in order to determine the right choice of investment that would like to do.

Form

On the basis of its form, proof of ownership shares in the form of a specific company. If you have shares, you can be said to be the owner of the company with stock owned. In contrast to stocks, bonds form as evidence of the recognition of the debt. In this case, You have evidence that the company has a debt to you a number of which are listed in the bond.

Earnings

The owner of the stocks have earnings that are called dividends with the frequency of the income is not specified. Bond owners get income from the interest rate that is specified in a certain period of time as set forth in the bond.

Advantage

Profits obtained by the owner of the shares is difficult because of the benefit estimates depend on corporate profits. In fact, if the company loss, shareholders can also be losers. Another case with shares, the owner of the bonds have the advantage that can be taken into account.

Price

Stocks have unpredictable price. Sometimes, have a high price, but it is not uncommon to also have a low price. This depends on the development of the company itself. Meanwhile, bond prices tend to be stable though highly sensitive to interest rate and inflation that has occurred.

Time

Based on the time, the stock has an unlimited period of time. There is no determination until when you have a stake in the company. Its own bond like an agreement receivable that has a specified time period. Specified clearly when you can charge or the company will refund your money, which provided the capital in the company.

Tax

For owners of stocks, net profits obtained as already taxed. While for the owner of the bonds, the advantages granted would still have to cut taxes so that taxes could also be taken into account first before the bonds paid the company.

Voting Rights

The owner of the shares have voting rights to be heard in determining the policies of the company because its status is the owner. The owner of the bonds have absolutely no right to vote to determine corporate policy. He only gave a loan of money. After that, off. The most important part for the owner of the bonds is paid on time with payment in accordance with the time is right and appropriate bonds which it owns.

Liquidation

If the company You are planting stocks experienced liquidation or dissolution of the company, the owner of the bonds have inferior claims, he has the rights to the Division of the remnants of the dissolution of the company that has been done. Here, the Division was not a priority of the company. Meanwhile, the bond owners obtained rights to the claim against assets belonging to the company according to the bond he has. The owner of the bonds are prioritized in the ownership of the assets of the company.