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How corporate bonds make you creditor of company

Companies pay you a set interest rate

When you get a corporate bond, you become a creditor for the company.

The company wants to use your cash to buy equipment or other resources. The company promises to pay you a set interest rate for that privilege.

They are riskier investments and there’s always a concern for credit risk.

Being a bond holder means technically you jump ahead of stockholders should the company default.


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