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What Is A Corporate Bond? |
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Answer» A company can issue bonds just as it can issue stock. Large CORPORATIONS have a lot of flexibility as to how much debt they can issue: the limit is whatever the market will BEAR. Generally, a short-term corporate bond has a maturity of LESS than five years, intermediate is five to 12 years and long term is more than 12 years. Corporate bonds are characterized by higher YIELDS because there is a higher RISK of a company defaulting than a government. A company can issue bonds just as it can issue stock. Large corporations have a lot of flexibility as to how much debt they can issue: the limit is whatever the market will bear. Generally, a short-term corporate bond has a maturity of less than five years, intermediate is five to 12 years and long term is more than 12 years. Corporate bonds are characterized by higher yields because there is a higher risk of a company defaulting than a government. |
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