From the Standpoint of the Issuing Company, a Disadvantage of Using

question 51

Multiple Choice

From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that

• A) bond interest is deductible for tax purposes.
• B) interest must be paid on a periodic basis regardless of earnings.
• C) income to shareholders may increase as a result of trading on the equity.
• D) the bondholders do not have voting rights.

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