Which of these statements about corporate bonds is correct?
A) Bonds provide equity financing.
B) Issuing new bonds dilutes the existing ownership in the firm.
C) Interest paid to bondholders represents a tax-deductible business expense.
D) Debenture bonds require assets pledged as collateral.

Question

Quizplus · Accepted Answer

Corporate bonds are essentially long-term IOUs issued by corporations. The interest paid on long-term debt is a tax-deductible expense.

Which of These Statements About Corporate Bonds Is Correct