The principal legal difference between a stockholder and a bondholder is:
A)the stockholder receives interest and the bondholder receives dividends.
B)only the bondholder can attend annual meetings.
C)the bondholder has an ownership interest and the shareholder is a lender.
D)the shareholder has an ownership interest and the bondholder is a lender.

Question

Quizplus · Accepted Answer

The principal legal difference between a stockholder and a bondholder is that the shareholder has an ownership interest in the company, while the bondholder is a lender to the company. Shareholders have voting rights and may participate in company decisions through meetings, while bondholders typically have no such rights. Bondholders receive interest on their investment, while shareholders may receive dividends if the company chooses to distribute profits.

The Principal Legal Difference Between a Stockholder and a Bondholder