Question

27. When a person buys stock in a company, that person is buying ________, but when a person buys a bond in a company, that person is ________ the company.

Answer 1

Answer: Ownership rights

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Explanation: Equity shares or common stocks are the ownership rights of the company, the holders of common stock have the voting right in every major decision of the company and are entitled for dividend according to the profit made by the company in that period.

On the other hand the bondholders are the creditors of the company as bond is considered as a debt obligation in the company. They are entitled to fixed rate of interest in return of the investment made by them.