Bonds Are a Popular Source of Financing Because

question 7

Multiple Choice

Bonds are a popular source of financing because

• A)the relative cost of issuing debt is often lower than the cost of issuing equity.
• 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:

Customer Orientation

A business philosophy where the needs and satisfaction of the customer are placed at the center of decision-making and strategy.

Management Concept

A theory or idea that provides a framework for effective management practices, including planning, organizing, leading, and controlling.

Flexible Product Designs

Products designed with the capability to be customized or adapted to meet different needs or preferences.

Production Processes

The steps, methods, or sequence of activities involved in the manufacture or production of goods.