In general,interest on bonds,like dividends on preferred stock,may be deferred until a later date at the discretion of management,making debt financing more appealing to corporate managers.

Question

Quizplus · Accepted Answer

Interest on bonds must be paid at regular intervals and cannot be deferred at the discretion of management without risking default. Dividends on preferred stock, however, can often be deferred, making this a key difference between debt and equity financing.

In General,interest on Bonds,like Dividends on Preferred Stock,may Be Deferred