A bond is a debt instrument, while stock is an instrument of ownership;

Bond holders have priority over stock holders when payments are made by the company;

Interest payments due to bonds are fixed, while dividends to stockholders are contingent upon earnings
and must be declared by the board of directors;

 There is a constant interest for a debt, while the interest on earnings depends on its amount.

Bonds have specific maturity date, at which time, repayment of the principal is due. In contrast, stocks
are instruments of permanent capital financing and does not have maturity dates; and

 Bonds have due dates, while stocks don’t.

Bond holders have no vote and no influence on the management of the firm, except when the
provisions of the bond and the indenture agreement are not met.

 Bond holders would function only when the contract of borrower is not followed.

Public Offering

involves selling of corporate bonds to the general public through investment bankers. The investment
banker provides assistance in the issuance of bonds by;

1. Helping the firm determine the size of the issue and the type of bonds to be issued;

2. Establishing the selling price; and

3. Selling the issue.

 It is open to all public investors.

Private placement

 is a sale of bonds directly to an institution and is a private agreement between the

issuing company and the financial institution without public examination.

ADVANTAGES OF PRIVATE PLACEMENT

1. The issue can be tailor-made to fit the needs of the issuing firm, as well as the investing firm;

2. The issue does not have to be registered; and

3. There are no underwriting fees paid by the issuing firm.

  There is a specific investor that the company chooses

Debenture- there is no particular thing where the money will be used.

Mortgage- the borrowed money allotted to specific things, like assets.