Bonds Are a Popular Source of Financing Because

question 173

Multiple Choice

Bonds are a popular source of financing because

• A)bond interest expense is deductible for tax purposes,while dividends paid on stock are not.
• B)financial analysts tend to downgrade a company that has raised large amounts of cash by frequent issues of stock.
• C)a company having cash flow problems can postpone payment of interest to bondholders.
• D)the bondholders can always convert their bonds into stock if they choose.

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Definitions:

Evacuation

The process of moving people away from a dangerous or potentially dangerous place to a safer location.

P-Wave Shadow Zone

The area of the Earth's surface where P-waves from earthquakes are not detected due to their refraction and reflection within the Earth's interior.

Core-Mantle Boundary

The core-mantle boundary is the transition zone between the Earth's solid silicate mantle and its liquid iron-nickel outer core.

S-Waves

Secondary or shear waves, a type of elastic wave that moves through the Earth during an earthquake, shaking the ground perpendicular to their direction of travel.