…If the company goes bankrupt, common shareholders are the last to get any money back. The company must first pay back its Creditors, who are investors that loaned it money….

…first investors to get paid back. The company must first pay back its Creditors, who are investors that loaned it money. Then the company pays preferred shareholders, and finally it…

When an institution wants to borrow money, instead of taking out a loan from a bank, it can sell bonds to investors. A bond is a type of debt for…

When a person or institution borrows money, in either loan or bond form, there is a cost associated with borrowing this money. An Interest Rate determines the amount of money…

What is a Coupon? When you buy a bond, you are loaning money to the Issuer, and the coupon is what the Issuer pays you for loaning it money. The…

…institutions to loan money to. It borrows money at the lowest interest rate of any US institution. This rate is called the Risk-Free Rate. When the US Government issues new…

…company, instead of taking out a loan, it can sell bonds to investors. Corporate bonds are a form of debt for the company. Because when it sells you a bond,…