One person owns a company's bond, and another owns a share of stock. The company makes a profit of $50 during a certain year. The bond holder is owed a coupon payment of $50, and the stock holder is promised a dividend of $50.

Which of the following is the likeliest outcome of this situation?

a.) The bond holder is paid $50

b.) The stock holder is paid $50

c.) Each investor is paid $25

d.) The company keeps the $50 as retained earnings

e.) None of these outcomes are likely to happen

Answer rating: 100% (QA)

a The bond holder ... View the full answer