Final answer:
In a surety bond, the party that pays the premium is called the Surety. When a firm issues bonds, the bondholders can take the firm to court and require it to pay if the firm fails to make the promised interest payments.
Step-by-step explanation:
In a surety bond, the party that pays the premium is called the Surety.
When a firm issues bonds, it may choose to issue many bonds in smaller amounts that together reach the total amount it wishes to raise.
Anyone who owns a bond and receives the interest payments is called a bondholder.
If a firm fails to make the promised interest payments, the bondholders can take the firm to court and require it to pay.