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.

---

Definitions:

Reinforcement

A process which increases the likelihood of a behavior by applying a stimulus immediately after the behavior occurs.

Delivered

In a behavioral context, refers to the administration or provision of a consequence or reinforcement following a behavior.

Positive Reinforcement

A process in behavioral psychology whereby a behavior is strengthened by the consequence of experiencing a positive condition.

Stimuli

External or internal cues that evoke a response from an organism or system.