Income bonds pay interest only if the issuing company actually earns the indicated interest.Thus, these securities cannot bankrupt a company, and this makes them safer from an investor's perspective than regular bonds.

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Income bonds pay interest only if the issuing company earns enough profit, which might make them seem safer for the company but not necessarily for the investor. Investors face a higher risk of not receiving interest payments compared to regular bonds, where interest payments are more assured.

Income Bonds Pay Interest Only If the Issuing Company Actually