What Are the Basic Differences Between Bonds and Stocks

question 9

Essay

What are the basic differences between bonds and stocks?

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Definitions:

Depreciation Tax Shield

The reduction in income taxes that results from taking a deduction for depreciation on the company's tax return, effectively reducing taxable income.

Cash Outlays

Payments in cash for expenses or investments made by a business or individual.

Auto Leases

Contracts that allow a person to use a car for a set period of time in exchange for regular payments, without owning the vehicle.

Lessee

The party in a lease agreement that gains the right to use an asset in exchange for making payments to the lessor.