The Advantage to a Corporation of Issuing Bonds Instead of Stock

question 121

Multiple Choice

The advantage to a corporation of issuing bonds instead of stock is that

• A)The owners keep control of the company.
• B)Bond prices do not fluctuate.
• C)The owners do not have to make interest payments on the loan.
• D)The possibility of default is lower when bonds are issued.

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Definitions:

Inventory

Items such as raw materials, work-in-progress, and finished goods that a company holds for the purpose of sale in the ordinary course of business.

Inventory Management

The systematic approach to ordering, storing, and using a company's inventory, including raw materials, components, and finished products.

Price Declines

A reduction in the market price of goods, services, or securities.

Physical Inventory

The process of counting all physical merchandise or stock in a store or warehouse to verify records and ensure accuracy in financial accounting.