What Are Coupon, Serial, Callable And Junk Bonds?
1 Coupon Bonds: Such bonds carry small detachable pieces of paper that gives the holder they right to receive the interest on the coupon bond. The interest may be payable every six moths every time when it is paid a coupon is detached from it. The coupon may be redeemed at the company or its nominated bank for receiving interest. 2 Serial bonds: when bonds are payable in installments they are known as serial bonds they are not redeemed in lump sum. If a bond is issued for thirty years. And is redeemable in there installment after every ten years. It will be known as a serial bonds. 3 Callable Bonds: These bonds do not carry prefixed period and can be call back any time by the borrowing . Callable bonds maturity depends on the discretion of the company. 4 Junk bonds: when a bound issue runs a considerably high risk of loss it is referred to junk bonds. Companies that are highly indebted and find it difficult to make the payment of the principal and interest issue junk bonds. To compensa
