An organization will issue a bond rather than borrowing because: Select one: a. All bonds are...
An organization will issue a bond rather than borrowing because: Select one: a. All bonds are tax exempt. b. The ability to “dis-intermediate,” or remove the bank from the borrowing process, can save as much as several percent per year in financing costs. c. The issuance of the bond to many buyers spreads risk which cuts down the costs of financing. d. All of the above. e. B and C.
Homework Answers
e. B & C
Because bond provides direct funding from investors with interference of bank. And also it segregates risk on several holders according to their investment. So its better to raise funds through bond rather than borrowing.
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