Which of the Following Is Not an Advantage of Issuing

question 68

Multiple Choice

Which of the following is not an advantage of issuing bonds instead of common stock?

• A) Stockholder control is not affected.
• B) Earnings per share on common stock may be lower.
• C) Income to common shareholders may increase.
• D) Tax savings result.

---

Definitions:

Average Collection Period

The average number of days it takes for a company to receive payments owed by its customers for goods or services sold on credit.

Credit Sales

Credit sales are transactions where the buyer is allowed to pay for goods or services at a later date, extending credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered on credit.

Compensating Balance

A minimum balance that must be maintained in a bank account, often required by banks in return for loans or as part of a service agreement.