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Why Would a Firm Prefer to Sell Its Bonds Through

Question 28

Multiple Choice

Why would a firm prefer to sell its bonds through private placement rather than an initial public offering?


A) Firms typically receive more favourable repayment terms from private holders.
B) There are more buyers for private placements than publicly traded bonds.
C) It is often cheaper for the firm to sell securities privately.
D) Private placements reduce the risk of default.

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