January 7, 2009

In the term of finance a debt security is know as bond, in this authorized person owes the holders a debt and which depend on the term of the bond, and which is obliged to pay interest or repay the principal at a later date means termed maturity.



Bonds and stock are both securities, but the major difference between the two is that stock-holders are the owners of the company, whereas bond-holders are lenders to the issuer.
Thus one can also say that the bond is a loan in which the issuer is the borrower, the bond holder is the lender, and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investment, or, in the case of government bonds, to finance current expenditure