Question:
A disadvantage of bond financing is:
a. Bonds do not affect the owner's control.
See Also
Bonds vs. cash: Understand the pros and consTreasury bonds: What they are, how they work, and how to investWhy Companies Issue BondsWhat Financial Liquidity Is, Asset Classes, Pros & Cons, Examplesb. Interest on bonds is tax deductible.
c. Bonds can increase return on equity.
d. It allows firms to trade on the equity.
e. Bonds pay periodic interest and the repayment of par value at maturity.
Bonds:
Bonds are used to raising funds or cash utilized for long-term capital investments of the company, like the construction of its new production facilities.
Answer and Explanation:1
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The answer is option E.
A disadvantage of financing through bonds is the issuing company will pay periodic interest and its par value at maturity, so...
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