What is the difference between stocks and bonds?

When Buying a Bond you are lending your money to that company for an known interest rate.

When buying a share/equity/stock you are (in a way) partner in the company.

Stocks are issued by a company to raise the capital from the market for which they pay the return as per the profit of the organisation, whereas the bonds are issued on interest and has the maturity period.

Stocks are basically an ownership in the company. In literal words, it represents a claim on the company's assets and earnings. You will have what is called a Voting right,i.e, a say in the companys's management.Your ownership is represented by a stock certificate.

Bonds on the other hand are a sort of debt with a certain cost to the capital. Interest is the cost to capital on bonds. It does not represent an ownership in the company.

 

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Stocks are much Riskier as compared to bonds. Bonds are safe instruments.Fixed Rte of return

A stock is a financial tool for companies either to raise capital or to raise additional capital to expand company operations , when you buy a stock you actually own a proportion of that company, owing a large percentage of a companies stock depending on its issues shares might entitle you to be a board member , it all depends on the country of operation, central bank rules and regulations or other government agencies rules and regulations. Stocks value go up and down according to market and industry and company performance. Bonds are another monetary tool for large corporations or banks or even government companies to raise capital as a long or short term loan, they pay you a coupon based on the agreed yield or payment structure, bonds have ratings depending on country, industry and the issuers maker strength and performance. When first issued bonds are on par value usually measured at 100 points and it goes up and down as per country, industry or the issuers performance, the coupon or interest is paid as per the bonds rules some times no annually and some time more. It is better to buy bonds less than par value because then your initial capital are mvestment is more than the initial bond value and you can make more time money this way. Governments issue bonds for short or long periods to raise money.

- bond debt security , yielding coupon rate , fixed income common form interest paid to bond holder tax deductible could be callable, putable convertible, 

- stock equity security permanent financing method  yielding dividend and change in fair market value 

- bond has superior over stock in case of liquidation and earning 

 

stocks owners has the right to vote , and in case of bankruptcy debtors will be paid first  meaning its an equity instrument

bond have no right to vote its a debt instrument, in case of bankruptcy will be paid first

 a Bond allows you to lend your money to that company for predecided interest rate.

a share/equity/stock gives you a partnership in the company who's stock you are having.

Stocks, or shares of stock, represent an ownership interest in a corporation. Bonds are a form of long-term debt in which the issuing corporation promises to pay the principal amount at a specific date. Stocks pay dividends to the owners, but only if the corporation declares a dividend.