Question

Public financial institutions issue bonds in two ways that are

Answer 1

Answer:

Corporate Bonds are Bonds issued by private or public sector companies in order to borrow funds from the market. The Indian Companies Act, 1956 has not made any distinction between Corporate Bonds and Debentures. The term Debentures has been defined as follows1 "debenture includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the company or not." Corporate Bonds can be issued by way of Public issue where the retail investors as well as institutions can participate in the issue or by way of Private Placement where only a limited number of investors participate in the issue. Corporate Bonds unlike equity shares don't guarantee an ownership in the Company but give regular income in the form of Interest. Corporate Bonds are generally issued for a period of 1 year to 20 years and they can also be Listed.

Corporate Bonds are differentiated on the basis of Maturity i.e. Short Term, Long Term or Medium Term; Coupon i.e. Fixed Rate, Floating Rate or Zero Coupon; Option i.e. Call Option or Put Option and Redemption i.e. Single redemption or Amortizing Bonds.

Explanation: