Why Is a Bond Considered to Be a Loan but a Share

question 17

Essay

Why is a bond considered to be a loan but a share of stock is not?

---

Definitions:

Profits and Losses

Financial terms referring to the income earned and the expenses incurred by a business during a period, impacting the overall financial health.

Personally Insolvent

A financial condition where an individual is unable to pay their debts as they become due.

Capital Accounts

Financial records that track the contributions to and distributions from owners or shareholders of a company, reflecting changes in ownership equity over time.

Final Settlement

Final Settlement refers to the conclusion of a financial transaction when the seller delivers the asset to the buyer and receives the agreed payment, fulfilling the contract's terms.