Define and Explain the Differences Between the Following Terms

question 163

Essay

Define and explain the differences between the following terms:
a.indirect and direct finance.
b.a bond and a stock.
c.the maturity date of a bond and the face value of a bond.
d.the Dow Jones Industrial Average (the Dow)and the Standard & Poor's (S&P)500.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on part of the corporation's profits.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Net Cash Flow

The amount of cash generated or lost over a specific period, considering cash inflows and outflows.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decline in its value due to wear and tear.