A Disadvantage of Using Bonds as a Method of Long-Term

question 148

Multiple Choice

A disadvantage of using bonds as a method of long-term financing is that:

• A) interest must be paid regardless of earnings.
• B) interest expense is tax deductible.
• C) bond holders do not have voting rights.
• D) issuing bonds results in higher earnings per share.

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Definitions:

Puberty

The developmental stage in humans marked by physical changes signaling the onset of sexual maturity and the ability to reproduce.

Junior High

An educational level that serves as a bridge between elementary school and high school, typically including grades 7-9.

Dropping Out

The act of leaving school, college, or university before completing the course of study.

Low-Income Households

Families or living units earning significantly less income than the average, often leading to limited access to resources and services.