Solution: Which of the following may be a disadvantage to issuing bonds to raise long-term capital? A) interest payments to bondholders are fixed charges B) ownership and control of the company are unaffected C) positive financial leverage may be achieved D) interest expense is tax deductible

Solution: Which of the following may be a disadvantage to issuing bonds to raise long-term capital? A) interest payments to bondholders are fixed charges B) ownership and control of the company are unaffected

Problem

Which of the following may be a disadvantage to issuing bonds to raise long-term capital?

A) interest payments to bondholders are fixed charges

B) ownership and control of the company are unaffected

C) positive financial leverage may be achieved

D) interest expense is tax deductible