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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