Which of the following are reasons that a company might prefer to sell bonds than issue stock?
A) It typically costs less to issue bonds than to issue stock.
B) Interest payments on bonds are tax-deductible for the firm, whereas dividend payments are not.
C) When a firm issues bonds, the percentage ownership of existing shareholders is not reduced.
D) All of the above are reasons that a company might prefer issuing bonds over issuing stock.
Correct Answer:
Verified
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