Bonds Stocks and Bonds
Debentures are unsecured loans to the Company. The company does not provide any collateral for the bond, but pays a higher interest rate to the creditor. In the case of bankruptcy or financial difficulties, the bondholder is later paid by the bondholder. Bonds are different from stocks and bonds, although all three are investment types. Let's discuss different types of investment options for small investors and entrepreneurs
Bonds and equities:
When you buy a stock, you become one of the owners of the company. Your fate with the rise and fall of the company. If the value of a company's stock soars, your investment pays a high dividend, but if the stock's value falls, the investment is low.
Debentures are safer than stocks because you are guaranteed payment at a high interest rate. You pay interest on the money you lent to the company until the maturity date, after which you give any return on your investment in the company. Interest is the profit you make on bonds. Although the stock is for those who like to play this field and are willing to risk for high returns, the debenture is for those who want a safe and secure income
Bonds and bonds are similar, except for one difference – bonds are safer than debentures. In both cases, you are paid a guaranteed interest that does not change the value, regardless of the company's fate. However, bonds are safer than bonds, but at a lower interest rate. The company provides collateral for loans. In addition, if liquidated, the bondholders will be repaid before the bondholders
Debentures are safer than equities, but not as safe as bonds. In the event of bankruptcy, you have no collateral, you can claim against the company. To compensate for this, the company pays higher interest rates to bondholders.
All investments, including stock bonds or bonds, have a risk factor. If you are unsure of the investment options that best suit your business, you can consult a small business consultant who will guide you on the best investment options available. Tomorrow's investment tomorrow can pay tomorrow's dividend