Which of the following is not a reason that a company would want to issue bonds instead of stock?
A)Interest payments can be deducted for income tax purposes.
B)Stockholders maintain control.
C)The impact on earnings from using borrowed money may be positive.
D)There is less risk associated with a bond issue.

Question

Quizplus · Accepted Answer

Issuing bonds does not inherently carry less risk compared to issuing stock. The risk associated with bonds involves the obligation to make interest payments and repay the principal, regardless of the company's financial situation. This can be particularly risky if the company faces cash flow problems.

Which of the Following Is Not a Reason That a Company