Bonds (11)

How do bonds rate with shares?

Investing in bonds has the following advantages and disadvantages when compared to investing in shares:


Advantages Investing in bonds

a) Receives Periodic Interest Income

Investor receives periodic fixed (or variable) interest income, irrespective of whether the company issuing the bonds is doing well or not.


b) Prior Right

Bondholders have a prior right over ordinary shareholders on the distribution of earnings and on claims in the event of bankruptcy.