One Reason a Corporation Might Issue Bonds Rather Than Selling

question 15

Multiple Choice

One reason a corporation might issue bonds rather than selling stock is that:

• A) bond interest is a tax-deductible expense.
• B) interest rates are high.
• C) dividends will lower the amount of tax due.
• D) bondholders have claims at liquidation.

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Definitions:

Positive Character Traits

Attributes or qualities that are morally good or beneficial in nature.

Sarbanes-Oxley Act

A U.S. federal law enacted to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to securities laws.

Certified Public Accountant

A professional designation given to accountants who pass a licensing examination and meet other statutory requirements.

Oversight Board

A governing body or committee that provides guidance, regulation, or supervision over a particular area or organization.