A principal dissimilarity between bonds and stocks is the lack of a contractual agreement to pay dividends to stockholders, whereas bondholders are guaranteed their interest payment.

Question

Quizplus · Accepted Answer

This statement is true. While stocks may pay dividends to shareholders, there is no contractual obligation to do so. On the other hand, bondholders have a contractual agreement with the issuer to be paid their interest payment on a predetermined schedule.

A Principal Dissimilarity Between Bonds and Stocks Is the Lack