Final answer:
The statement that stocks represent an ownership interest in a corporation and bonds are a form of long-term debt is true. Stocks may pay dividends if declared by the corporation, while bonds pay back the principle at maturity and offer periodic interest payments.
Step-by-step explanation:
The statement you provided is indeed true. Stocks or shares of stock represent an ownership interest in a corporation. When you buy stock in a corporation, you become one of the owners, known as a shareholder. Shareholders have a claim on the corporation's assets and earnings. As you mentioned, stocks can pay dividends, but this is at the discretion of the corporation and only occurs if the corporation declares a dividend.
On the other hand, bonds are a form of long-term debt where the issuing corporation agrees to pay back the principal amount on a specific date, which is known as the bond's maturity date. In addition to the principal repayment, bonds also typically pay periodic interest payments, called coupon payments, to bondholders.
Both stocks and bonds are common ways for corporations to raise funds. Stocks do this by selling partial ownership in the company, while bonds do this by borrowing funds that will be repaid over time.