Final answer:
The incorrect statement about bonds is 'Bonds pay dividends to shareholders.' Bonds do not pay dividends; instead, they pay interest to bondholders known as the coupon.
Step-by-step explanation:
The question asks which statement about bonds is not correct. Here is a breakdown of the statements provided:
- Bonds represent a form of debt.
- Bondholders are creditors of the issuing entity.
- Bonds pay dividends to shareholders.
- Bonds have a specified maturity date.
The third statement is not correct about bonds. Unlike shares of stock, which may pay dividends to shareholders, bonds pay interest to the bondholders. This interest is known as the coupon. Therefore, the correct answer is:
c) Bonds pay dividends to shareholders. - This statement is not correct.