One advantage to the issuing firm of a split coupon bond is that cash is currently conserved.

Question

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A split coupon bond allows the issuer to conserve cash in the short term since the interest payments are smaller than they would be with a traditional bond, which means less money needs to be paid out each period. This can be advantageous for companies that are conserving cash or that have limited borrowing capacity.

One Advantage to the Issuing Firm of a Split Coupon