Which of the Following Is Not a Reason That a Corporation

question 79

Multiple Choice

Which of the following is not a reason that a corporation would want to issue bonds instead of stock?

• A)Interest payments can be deducted for income tax purposes.
• B)Stockholders maintain control.
• C)The impact on earnings may be positive.
• D)There is less risk associated with a bond issue.

---

Definitions:

Total Costs

The aggregate amount of all expenses incurred in the production of goods or services, including fixed and variable costs.

Linear

A mathematical relationship or function that can be graphically represented by a straight line, characterized by consistent changes.

Flexible Budget

A flexible budget designed to adapt in line with changes in the amount of activity or volume.

Variable Manufacturing

Costs that vary directly with the level of production, such as raw materials and direct labor costs, as opposed to fixed manufacturing costs.