Select the correct words in the following table, which shows the principal differences between debt capital and equity capital.

Bonds

(Debt)

Stock

(Equity)

Annual payments are required.

[Yes / No] [Yes / No]

Principal payments are required. [Yes / No] [Yes / No]

Therefore, risk to the entity is [Higher / Lower] [Higher / Lower]

But its cost is relatively [Higher / Lower] [Higher / Lower]