Businesses typically issue bonds to finance
A)their inventories.
B)payments to their workers.
C)spending on new plant and equipment.
D)dividend payments to their stockholders.

Question

Quizplus · Accepted Answer

Businesses typically issue bonds to finance spending on new plant and equipment or other long-term investment projects. Issuing bonds provides a way to raise large amounts of money upfront while spreading out the payments over time through interest payments. Bonds are generally not used to finance day-to-day expenses like inventories or payroll, and dividends are typically paid out of profits rather than being financed through new bond issues.

Businesses Typically Issue Bonds to Finance