What type of securities are considered debt obligations of corporations?

Debt obligations of corporations refer to securities that represent borrowed funds that the issuing corporation is obligated to repay with interest. Bonds, debentures, and equipment trust bonds all fall under this category of securities.

Bonds are formal debt instruments that companies issue to investors. When investors purchase bonds, they are essentially lending money to the company in exchange for periodic interest payments and the return of the principal amount when the bond matures. This arrangement highlights how bonds serve as a means for corporations to raise capital.

Debentures are a specific type of bond that is not secured by physical assets or collateral. Instead, they are backed only by the general creditworthiness and reputation of the issuer. They are often issued by corporations for long-term financing, emphasizing the debt aspect of the security.

Equipment trust bonds are another form of debt security used by companies that need to finance specific equipment, such as aircraft or machinery. The equipment is held in trust as collateral for the bond, providing additional security to the bondholders in the event of a default.

Therefore, all three types—bonds, debentures, and equipment trust bonds—qualify as debt obligations of corporations, making the collective answer that includes these three types accurate.