Corporate bonds are considered safer than common stock issued by the same company because:
A) bonds and similar fixed-rate securities are guaranteed by SIPC.
B) the par value of bonds is generally higher than that of stock.
C) if there is a shortage of cash, dividends are paid before interest.
D) bonds place the issuer under an obligation but stock does not.
Answer: D) bonds place the issuer under an obligation but stock does not.