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URL:  http://boards.fool.com/bonds-pay-interest-stocks-pay-dividends-they-are-21662135.aspx

Subject:  Re: What to do with a losing IRA Date:  11/26/2004  11:01 PM
Author:  Crosenfield Number:  43297 of 75340

Bonds pay interest. Stocks pay dividends. They are different things.

The company, if doing well, should increase the dividend paid to its owners (shareholders). If doing poorly, it may reduce or omit the dividend. The shareholders will be disappointed but they should understand.
The interest on bonds is an obligation of the company. It will pay the obligatory amount. It will NEVER increase the payment no matter how well the company is doing.
If short on money and the company cannot pay both the dividend and the interest on its bonds, the interest on the bonds comes first.
Best wishes, Chris
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