Why Would a Corporation Issue Bonds Payable Instead of Issuing

question 104

Multiple Choice

Why would a corporation issue bonds payable instead of issuing stock?

• A)Debt is a less expensive source of capital than stock.
• B)Borrowing by issuing bonds payable carries no risk to the company.
• C)Debts affect the percentage of ownership of the corporation by the stockholders.
• D)Debts don't carry any cost.

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Definitions:

Machine Downtime

The period during which a machine is not operational or productive, often due to maintenance, repairs, or technical failures.

Percentage Of Idle Time

The proportion of time that resources remain unutilized during the production process.

Balanced Scorecard

A strategic planning and management system used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance against strategic goals.

Financial

Relating to money or how money is managed, including aspects such as investments, expenses, and revenue generation.