1. Different issuers can issue bonds, whether they are national or local social organizations or enterprises, while shares can only be issued by joint-stock enterprises.
2. The stability of income is different. From the perspective of income, the interest rate is fixed before the bond is purchased, and fixed interest can be obtained at maturity, which has nothing to do with the profitability of the company issuing the bond. The dividend yield of general stocks is uncertain before purchase, and the dividend income changes with the change of profitability of joint-stock companies. More profits means more, less profits means less, and no profits are allowed.
3. Different capital preservation capabilities From the perspective of principal, the principal can be recovered when the bond matures, which means that even the principal and interest can be obtained, just like borrowing money. The stock has no expiration date. Once the stock principal is handed over to the company, it cannot be recovered. As long as the company exists, it will always be dominated by the company. Once a company goes bankrupt, it depends on the liquidation of its remaining assets. Even the principal will be eroded, especially the minority shareholders.
4. Different economic interests The above-mentioned principal and interest situation shows that bonds and stocks are essentially two different securities. The two reflect different economic interests. Bonds represent only a creditor's right to the company, while stocks represent the ownership of the company. Different ownership relationships determine that bondholders have no right to ask about the company's operation and management, while stock holders have the right to directly or indirectly participate in the company's operation and management.
5. Bonds with different risks are only general investment objects, and the turnover rate is lower than that of stocks. Stock is not only the investment object, but also the main investment object of financial market. Their turnover rate is high, the market price changes greatly, and they can go up and down, with low security and high risk, but they can get high expected returns, which attracts many people to invest in stock trading.
In addition, when the company pays the income tax, the interest on corporate bonds has been deducted from the income as expenses and charged before the income tax. Dividends on company stocks belong to the distribution of net income, not expenses, and are charged after income tax. This has a great impact on the company's fund-raising strategy and is often used as a decisive factor in deciding whether to issue stocks or bonds.