Asked by alexis nuara on May 01, 2024
Verified
Stocks are different from bonds because ___________________.
A) Stocks, unlike bonds, are major sources of funds.
B) Stocks, unlike bonds, represent residual ownership.
C) Stocks, unlike bonds, give owners legal claims to payments.
D) Bonds, unlike stocks, represent voting ownership.
E) Bonds pay dividends.
Residual Ownership
The remaining interest or value that shareholders have in a company after all obligations and liabilities have been satisfied.
Legal Claims
Rights to seek redress or enforcement through legal action.
- Grasp the distinction between equity and debt securities, including their valuation and legal implications.
Verified Answer
JP
Jorgie PolyzosMay 08, 2024
Final Answer :
B
Explanation :
Stocks represent residual ownership in a company, meaning stockholders are owners of the company and have a claim on its assets and earnings after all debts and obligations have been paid. Bonds, on the other hand, are a form of debt investment and do not confer ownership rights.
Learning Objectives
- Grasp the distinction between equity and debt securities, including their valuation and legal implications.