Stocks differ from bonds because:A. bond cash flows are known while stock cash flows are uncertain. B. firms pay bond cash flows prior to paying taxes while stock cash flows are after tax. C. the ending par value of a bond is known at purchase while the ending value of a share of stock is unknown at purchase. D. All of the above

Question

Phoenix Gonzalez

Business

19 November, 03:13

Stocks differ from bonds because:A. bond cash flows are known while stock cash flows are uncertain. B. firms pay bond cash flows prior to paying taxes while stock cash flows are after tax. C. the ending par value of a bond is known at purchase while the ending value of a share of stock is unknown at purchase. D. All of the above

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Answers (1)

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Rene Booth · Answer 1

All of the above

Explanation:

Stocks are equity financing and bonds are a type of debt financing that is the basic difference between the two. Along with that, the cash flow which bonds will provide in the futures is fixed and known, whereas stocks are uncertain. Similarly, the par value of the bond at the maturity date is known. So all the above options are right.