Please reply with a shot response to the following posts:

Q #1

The main difference between a bond and a share of stock is that a share of stock holds ownership in the corporation and bonds are a debt that the issuing entity is promising to repay in the future (Bragg, 2022, para. 3). There are advantages of issuing bonds instead of obtaining financing from the company's owners. Bonds don't affect owner control because there is no equity involved. The interest on bonds is tax deductible. It's also possible to increase return on equity with bonds. If the return on borrowed money is greater than the interest being paid, this is called financial leverage.

Q #2

"Stocks give you partial ownership in a corporation, while bonds are a loan from you to a company or government. The biggest difference between them is how they generate profit: stocks must appreciate in value and be sold later on the stock market, while most bonds pay fixed interest over time" (Davis, 2022).

There are several advantages to the corporation in using bonds as a financial instrument. The corporation does not give up ownership in the firm, it attracts more investors, it increases its flexibility, and it can deduct the interest payments from corporate taxes. Bonds can be a very flexible way of raising debt capital. They can be secured or unsecured, and you can decide what priority they take over other debts.

Q #3

Dividends are " corporate earnings that companies pass on to their shareholders. They can be in the form of cash payments, shares of stock, or other property. Dividends may be issued over various timeframes and payout rates." Rather than paying a dividend in cash, stock dividends are rewarded to shareholders that get paid in additional shares. Cash dividends will reduce the stockholder equity while stock dividends do not reduce stockholder equity. A treasury stock is a stock that is bought back by the issuing company. What this does is reduce the outstanding stock in the open market.

Q #4

Dividends are distribution of cash to stockholders. Board of Directors usually make the decision to pay dividends or not. There are also stock dividends declared by directors to distribute additional shares of its own stock to its stockholder without any payment return and are different from cash dividends. A corporation does not have to pay dividends.

Liquidating dividends is the distribution of cash or assets when the intent is to close a business. The liquidation of dividends should happen before the close of business because it needs to satisfy any lender obligations. A liquidating dividend is essentially a return of the investors' original capital to them, plus or minus any residual retained earnings or retained losses of the business (Bragg, 2022).