Identify the following as either an advantage (A) or a disadvantage (D) of bond financing. a. Bonds
Question:
a. Bonds do not affect owner control.
b. A company earns a lower return with borrowed funds than it pays in interest.
c. A company earns a higher return with borrowed funds than it pays in interest.
d. Bonds require payment of periodic interest.
e. Interest on bonds is tax deductible.
f. Bonds require payment of par value at maturity.
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Related Book For
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
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