Income Bond

Posted in Finance, Accounting and Economics Terms, Total Reads: 2081

Definition: Income Bond

An income bond is a financial instrument in which the issuer has no obligation to make any coupon payments to the investor. The coupon payments are made only when the issuing firm has been able to make enough earnings.

Hence, in such a debt security, only the face value of the bond is to be repaid.

Such an instrument is advantageous to the issuing firm as it can help avoid bankruptcy during difficult financial environment and help in raising capital too, whereas it is disadvantageous to the investor since there is no guarantee of receiving any coupon payments that is extra amount over the face value of the bond.



Browse the definition and meaning of more terms similar to Income Bond. The Management Dictionary covers over 7000 business concepts from 6 categories. This definition and concept has been researched & authored by our Business Concepts Team members.

Search & Explore : Management Dictionary

Share this Page on:
Facebook ShareTweetShare on Linkedin