Which of the following statements concerning bonds is FALSE? A. Bonds can be issued either at par, premium, or discount. B. Bonds interest is tax deductible. C. Bondholders have voting rights. D. Bonds are usually considered to be a long term liability.

Why might a company choose to raise money through bonds, rather than take out a note payable or issue stock? What are the advantages and disadvantages of bonds? What does it mean to issue a bond at a "premium" or at a "discount"?

Which of the following is a disadvantage to a corporation issuing bonds? Group of answer choices A)The required interest payment must be met each period. B)The liquid nature of the bonds makes them attractive to investors who may not want to hold them to maturity. c)The large principal payment due at maturity. d)Both the first and third answers above are both disadvantages. e)The first, second and third answers above are all disadvantages.

When a company exercises its call provision on bonds, the company pays the book value of the bonds at the time of the call. a gain occurs because the call price is generally set below the issue price. a loss occurs because the call price is generally set above the issue price. the company pays the face value of the bonds.

Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a company. Bonds require payment of periodic interest.

Which of the following is a disadvantage of using bonds?     a. Bondholders do not participate in extraordinary profits; the payments are limited to interest. b. Bondholders do not have voting rights. c. Debt (other than income bonds) produces fixed charges, increasing the firm’s financial leverage. d. Flotation costs of bonds are generally lower than those of ordinary (common) equity shares.

Which of the following statements about Floating-Rate Debt is NOT true?  A) Floating-rate debt has a stated interest rate that fluctuates in tandem with some interest rate benchmark (for instance, LIBOR). B)Floating-rate bonds allow companies to keep reported book value and fair value at the same level that protects investors from losses. C)The issuing company benefits from floating-rate debt when market interest rates increase. D)Floating-rate debt is issued at par.

To what extent does the company’s bond issuance policies support or hinder their strategies? For example, if the company is attempting to fund operating expenses, refinance old debt, or change its capital structure, are they issuing sufficient bonds to achieve these goals? Be sure to substantiate claims.

A discount on bonds payable: Multiple Choice   A) Occurs when a company issues bonds with a contract rate more than the market rate.   B) Is not allowed in many states to protect creditors.   C) Occurs when a company issues bonds with a contract rate less than the market rate.   D) Decreases the total bond interest expense.   E) Increases the Bond Payable account.