What is a bond? What are the differences between bond and - TopicsExpress

What is a bond? What are the differences between bond and stock? Companies and government organizations raise money by issuing a bond offering. It is similar to stock. However, stock is buying a very small share of the ownership of a company. By investing stock share in the companies, a stockholder has the right to share the profit of the firm in the form of dividends. In the other hand, bonds are the loans to the companies by the individual investor. The bond investor is promised to get the return at a fixed interest rate. In this essence, the companies raise their capital by issuing debt in the form of a bond.

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