Why might an investor choose a corporate bond over a stock?

An investor may choose a corporate bond over a stock primarily for the reason of seeking more stable income through periodic interest payments. Corporate bonds are debt securities issued by companies, and when an investor purchases a bond, they are essentially lending money to the issuer in exchange for regular interest payments, typically made semi-annually. This steady income stream is particularly appealing, especially for those looking for predictable cash flow, such as retirees or conservative investors.

Unlike stocks, which can have fluctuating dividends and can be subject to significant price volatility, corporate bonds provide a fixed interest return over time. Bonds are generally viewed as lower risk compared to stocks, as they are prioritized over equity in the capital structure during liquidation or bankruptcy scenarios. This characteristic further enhances their appeal for investors who prioritize income stability and capital preservation.

The other options mentioned do not align as closely with the inherent characteristics and purposes of investing in corporate bonds. For instance, while corporate bonds are less risky than stocks, they do not provide the growth potential associated with equities, nor do they typically offer voting rights, which are exclusive to shareholders. Additionally, the bondholder's interest income may still be subject to taxation, depending on the jurisdiction and specific circumstances.