Question

Because stocks rely on dividends as the principal source of cash flow, ascertaining stock prices is an easier and more precise process than the valuation of bonds, which relies on variable coupon payments.
a. True
b. False

Answer 1

Answer:

B

Explanation:

Shares grants ownership rights to holders of the shares.

The payment of stock is not fixed. it is variable and it depends on the net income earned by a company. stockholders are paid after bondholders have been paid.

bonds are debt instruments issued by a company

coupon payments are fixed and contractual.

bonds are thus easier to value