Bond ValueDebtDEBT means a sum of money due by certain and expresses agreement. In a less technical sense, it means a claim for money. Loans from banks or financial institutions are one of the popular forms of debt.BondsDebt capital consists of mainly bonds and debentures. The holder of debt capital does not receive a share of ownership of the company when they provide funds to the firm. Rather, when a company first issues debt capital, the providers of debt capital purchase a debenture, which involves lending money to the firm. In return for loaning this money, bond holders have a right to certain guaranteed payments during the life of the bond.For example : a company issued a bond of a face value of Rs. 100 carrying a coupon rate of 10 per cent for ten years. This entitles the bondholder to receive Rs. 10 (10 per cent of Rs. 100) for ten years as interest. At the end of tenth year, the bondholder is also entitled to receive back the invested amount of Rs. 100. Irrespective of the level of profits or losses, which company makes during that period of ten years, the bondholder is entitled to receive the coupon interest during that period.
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