Question:
One reason a corporation might issue bonds rather than sell stock is that:
A. bond interest is a tax-deductible expense
See Also
Understanding Corporate Bonds | PIMCOWhy Are Companies Issuing Corporate Bonds to Raise Funds? - AsperoWhy are bonds so important? - HoldunMunicipal Bonds: The State of the StatesB. Interest rates are high
C. Dividends will lower the amount of tax due
D. Bondholders have claims at liquidation
Financing:
In order to provide cash for operations, companies that are publicly traded have the ability to generate cash through sales of their equity or liabilities. Equity financing includes selling shares of the company as stocks and debt financing includes options like issuing bonds.
Answer and Explanation:1
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One reason a corporation might issue bonds rather than sell stock is that bond interest is a tax-deductible expense.
When a company expects that it...
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