give a example of direct finance including issuing of shares and bonds and the people who buy it what they do and what are shares and bondskindly explain it in detail and don't use difficult words

Sure, let's break it down.

Direct finance is a method of raising funds where companies sell their securities like shares and bonds directly to the public. This is done to avoid borrowing from banks and paying interest.

Let's take an example. Suppose a company named "XYZ" needs money to expand its business. Instead of going to a bank for a loan, it decides to raise money directly from the public. It does this by issuing shares and bonds.

1. Issuing of Shares: Shares represent ownership in a company. When XYZ company issues shares, it is essentially selling a part of its ownership to the public. People who buy these shares become shareholders of the company. As shareholders, they have the right to vote on company matters and receive a portion of the company's profits, called dividends.

2. Issuing of Bonds: Bonds are like IOUs. When XYZ company issues bonds, it is promising to pay back the money it borrows from the public, with interest, after a certain period of time. People who buy these bonds become creditors of the company. They do not have ownership rights like shareholders, but they have the assurance that they will get their money back with interest.

So, when people buy shares, they are essentially buying a part of the company. They do this in the hope that the company will make profits and they will receive dividends. They also hope that the price of the shares will go up so they can sell them for a profit.

When people buy bonds, they are essentially lending money to the company. They do this in the hope that they will get their money back with interest.

Shares and bonds are both ways for companies to raise money directly from the public. The difference lies in what the buyer gets - ownership and potential dividends in the case of shares, and a promise of repayment with interest in the case of bonds.