As a bondholder, the company or agency is obligated to pay its debt to you prior to paying dividends to the stockholders. Bonds are sold with a face value and a specific rate of return. The value of the bond may change over the length of the term, based on how much people want to buy or sell that particular bond. Each bond has a current market price and a set interest rate. As the price changes, the real interest rate changes.
Some bonds pay regular dividends.
Some pay only the face value at maturity. Municipal bonds are those issued by state or local governments to finance public works projects or services. The interest on municipal bonds is not taxed by the federal government and may not be taxed by the state. Municipal bonds sold by Ohio governments are not subject to Ohio income tax. Junk bonds are highly speculative and risky investments.