When an investor buys a corporate bond,the ________ is a loan to the corporation.

Question

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When an investor buys a corporate bond, the principal of the bond is a loan to the corporation. The investor loans the corporation money, and in return, the investor is paid interest periodically until the bond matures and the principal is returned. The interest payment is known as the coupon payment. Dividend payments are associated with stocks, not bonds.

When an Investor Buys a Corporate Bond,the ________ Is a Loan