In utilizing a ________ the issuer can annually deduct the current year's interest accrual without having to actually pay the interest until the bond matures.

Question

Quizplus · Accepted Answer

A zero coupon bond is a type of bond that does not pay any interest until maturity. This allows the issuer to deduct the full amount of the interest accrual each year, without having to make any actual interest payments until the bond matures. This can be advantageous for the issuer, as it can reduce their taxable income and improve their cash flow.

In Utilizing a ________ the Issuer Can Annually Deduct the Current