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:

Subject Matter Jurisdiction

The authority of a court to hear cases pertaining to a specific type of issue or within a particular category of legal matters.

Concurrent Federal Jurisdiction

A situation where both federal and state courts have the authority to hear and decide on the same case.

Diversity of Citizenship Jurisdiction

Jurisdiction in federal courts arising from cases between citizens of different U.S. states or between U.S. citizens and foreign nationals or entities, intended to prevent state bias.

Writ of Certiorari

A court order in which a higher court reviews a decision of a lower court.