What is the primary purpose of a corporate bond?

The primary purpose of a corporate bond is to raise capital for a corporation's operations. When a corporation issues bonds, it is essentially borrowing money from investors, promising to pay back the principal amount along with interest at specified intervals. This capital is vital for various purposes, such as funding new projects, expanding operations, refinancing existing debt, or managing cash flow.

In contrast, providing dividends to shareholders relates specifically to equity financing rather than debt financing. Dividends are payouts that companies distribute to their shareholders out of profits, which is not the purpose of bonds. Insuring financial assets does not pertain to corporate bonds either, as insurance involves risk management rather than capital raising. Finally, while stock options may relate to employee compensation, they do not fulfill any role similar to that of corporate bonds in terms of financing a corporation's activities. Thus, the option that describes the role of corporate bonds most accurately is one that highlights their function in capital generation.