A firm sells a corporate bond to:

Question

Quizplus · Accepted Answer

Corporate bonds are sold to the public in order to borrow money. It is a form of debt financing where the issuer (the firm) borrows money from investors (the public) and pays them back with interest over a period of time. Option A is incorrect as a firm cannot sell a bond to its parent corporation as it is not an external entity. Option C is incorrect as the government does not purchase corporate bonds to lend money. Option D is incorrect as corporate bonds do not involve sharing profits but rather the payment of interest to investors.

A Firm Sells a Corporate Bond To