Bonds are debt securities that the issuer (or the debtor who releases the bonds) must repay with interest, usually called a coupon. These are therefore fixed bonds, with variable interest rates, because the rate changes from one bond to another, but which are mainly fixed until the maturity of the bond. The yield on bonds in general is the amount investors would earn when the bond earns until maturity. This is calculated a little differently than the common dividend yield, because it calculates the percentage (yield) of the bond and not the dividend yield. Bond yields are important to the investor, because of the interest rates they pay. Variable interest rates vary with variable bonds. This means that the investor must calculate the yield to maturity of each bond to determine if the interest rate is a good deal. They are important because without a return (from the interest rate paid), no investor would buy a company's debt. How are a common stock investor and a bond investor different? AND What different expectations do they have