What role does a corporate bonds market play in economy of a country
A bond is a debt obligation, where the borrower is a government or private entity and the lender is the investor. Among the different types of bonds available for investors, corporate bonds are a popular choice among investors. Let’s delve deeper into corporate bonds. What are Corporate Bonds and how do they boost the country’s economy? A corporate bond can be understood as a kind of debt security issued by a private or public company to generate capital. These are sold to investors who get pre-decided interest payments at a fixed or variable rate of interest. When the bond completes its tenure and reaches maturity, the interest payment stops and the amount originally invested by the investor is returned to him. The money a company raises through corporate bonds can be used for various business activities like the purchase of new equipment, building a new plant, increasing production, etc. As businesses expand their activities, it increases production and the supply of good...
