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Investor receives periodic
fixed (or variable) interest income, irrespective of whether the
company issuing the bonds is doing well or not. |
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Bondholders have a prior right
over ordinary shareholders on the distribution of earnings and
on claims in the event of bankruptcy. |
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As the income (coupons) derived
from bonds is stipulated, the investor does not get paid more
even if business is booming as in the case of ordinary
shareholders who may be given higher dividends. |
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Bondholders have no voting
rights and are not owners of the company while shareholders have
a right to vote at general meetings as owners of the company in
accordance to the number of shares they hold. |
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