Difference between stocks and bonds

18 Feb 2019 04:46 PM

Stocks are an instrument which means that the shareholder is the owner of a portion of the company's shares. The stocks have a maturity date and have a return associated with the company's profitability (variable yield). Finally, this dividend is distributed in case of a decision within the company to distribute. It is divided into ordinary shares and has no due date. The shares are excellent and resemble bond, have a due date, have a fixed return.

Rights of the Shareholder:

1- The right to receive a dividend in the case of distribution of profits.

2- The right to attend public assemblies and to vote.

3- In case of liquidation, he has the right to obtain a percentage of the assets of this company.

4- The right to obtain periodic data and information on the results of the company.

5- He has priority in obtaining shares in an increase in the company's capital.

What are stock prices?

1- Issue price: The price at which the share is issued (a company that promotes and covers the subscription)

2- Market price: The price of the stock according to the strength of supply and demand (secondary price)

3- The real price: the issue price in addition to the share per share of the annual yield.

Bonds are considered to be debt to the company, since the issuer of the bond is considered a debtor and the bond holder is the creditor.

Bonds are characterized by a fixed return obtained in case the company achieves profit or loss, but at the end of the maturity period, the bond holder obtains the principal amount.

Types of bonds

1- Negotiable Bonds: The price of the bond is determined according to prevailing market interest rates (offer and demand)

2- Non-negotiable bonds

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