When a Corporation Issues a Bond

question 104

Multiple Choice

When a corporation issues a bond

• A) it is called equity capital.
• B) it is making a promise to pay interest each year but not repay the principal.
• C) it is making a promise to pay interest each year and to repay the principal at a stated time in the future.
• D) it is called financing through the stock market.
• E) the purchaser of the bond assumes ownership rights in the corporation.

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Definitions:

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