Irredeemable Bonds: Meaning & Definition with Example

The bonds having uncertain or no maturity period are called irredeemable bonds. Sometimes the company issues bonds which do not have maturity period. By purchasing this type of bonds you will get fixed coupon amount quarterly, semiannually or annually until the company run but you will not get back your invested amount.

For example, suppose you have invested $10000 on bond yielding 10% coupon interest annually.

In this example, no maturity period is given it means that the amount that you have invested will not be returned back. You will only receive the annual coupon payment of $1000 until the company exist and run.

Post a Comment

Previous Post Next Post