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When a firm decides to promote stock, which in flip will be purchased and bought by monetary traders, it known as a public company. They use bonds to raise new monetary capital that pays for investments, or to lift capital to repay old bonds, or to purchase different firms. A corporate bond is issued by corporations, however bonds are also issued by various ranges of authorities. A big firm, for example, might subject bonds for $10 million; the firm promises to make interest payments at an annual rate of 8%, or $800,000 per 12 months and then, after 10 years, will repay the $10 million it originally borrowed.
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