With respect to valuation, stocks and bonds are dissimilar in that:

A) bond cash flows are known precisely while stock cash flows are estimates.
B) periodic bond interest payments form an annuity while dividends are unlikely to be constant.
C) bond cash flows are contractual commitments, stock cash flows are not.
D) All of the above

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NICOLE CHIONG · Accepted Answer

Final Answer : D, Explanation :  A) Bond cash flows are typically fixed and certain, while stock cash flows are largely dependent on the performance of the issuing company, and are therefore subject to greater uncertainty.B) Bond interest payments are typically fixed and paid on a periodic basis, while dividend payments are subject to the discretion of the company's board of directors and may fluctuate over time.C) Bondholders have a contractual right to receive periodic interest payments and the return of their principal at maturity, while stockholders have no such guarantee and are subject to the performance of the company.

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