Which of the following is true?
A) It is common for companies to both retire debt and issue new bonds in the same year as a way to replace higher interest rate debt with lower rate issuances.
B) Payment of interest is an investing activity since we would not have interest unless we borrowed money or sold bonds to the public.
C) Retractable bonds require cash out?ow connected to investing when the issuing corporation redeems the bonds.
D) The corporation will have to pay cash to bond investors when those investors demand to call the bonds.

Question

Quizplus · Accepted Answer

A) This is a common financial strategy known as refinancing, where companies retire older, higher-interest debt and issue new bonds at a lower interest rate to reduce their interest expenses.

Which of the Following Is True