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
