There is a tax advantage for a company to issue bonds in lieu of shares.

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Quizplus · Accepted Answer

In general, interest paid on bonds is deductible as a business expense for tax purposes, while dividends paid on shares are not. Therefore, issuing bonds allows a company to reduce its tax liability. Additionally, interest paid to bondholders is typically fixed and does not change with changes in the company's earnings or profitability, making it a more predictable form of financing compared to dividends on shares.

There Is a Tax Advantage for a Company to Issue