Bond Market

• When a company seeks to issue debt, it will often choose to do so by issuing debts on the bond market. When a company issues debt, it is effectively selling debt to investors. These investors will buy the debt with promise that they will be paid back for their purchase at a particular rate of interest. The less of a credit risk the company is, the lower the interest rate that the company can command on its debt.
  
  

Stock Market

• When a company issues stock on the stock market, it is essentially selling off pieces of itself to investors. Each share that an investor purchases entitles him to ownership of a small sliver of the company. These shares can be bought and sold many times over at different prices, which change based on the perceived value of the company in the eyes of investors.
  
  

Comparative Efficiencies

• The main measure of efficiency in a financial market is the ease with which a security can be traded, both in the sense that there is an active market of buyers -- known as an asset's liquidity -- and an ease of transaction. Both stocks and bonds have a large market of buyers and sellers, and trading is logistically simple. However, occasionally, some bonds will be difficult to find a market for, such as during the credit crisis of 2008.
  
  

Considerations

• Although the bond market is not less efficient than the stock market per se, the way in which bonds are rating often receives criticism. Most bonds receive a rating from credit agencies that examine the bond's issuer and attempts to determine the likelihood that a bond issue will be paid back. This rating system relies heavily on the view of individual analysts and agencies, rather than the market as a whole, and is often slow to react to change's in the bond issuer's status.