money, idea, business @ Pixabay

A bond is a debt security that represents an agreement between the issuer and the investor. The issuer of a bond will typically borrow money from investors, with interest payments being made to those investors throughout the life span of the bond. When it’s time for repayment, there are two ways in which this can happen: through maturity or by exchanging bonds for common stock at the option of the bondholders. A bond is a debt security that represents an agreement between the issuer and the investor. The issuer of a bond will typically borrow money from investors, with interest payments being made to those investors throughout the life span of the bond. When it’s time for repayment, there are two ways in which this can happen: through maturity or by exchanging bonds for common stock at the option of the bondholders. In order for companies to be able to repay their debts without defaulting on them, they must have enough cash flow coming in from operations (or borrowing) so that when all contractual obligations come due–a company’s long-term debt plus its short term loans –it has sufficient funds on hand available to pay off its debts

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