Question

What is generally the reason for a company to issue bonds?

A) It promotes good will with the public.
B) It serves as a means to raise revenue.
C) It raises the value of their stock for the stockholders.
D) It prevents them from having to reveal their financial statements

Answer 1

The answer to the question is B - It serves as a mean to raise revenue.

A bond basically works as a loan from an investor to a corporation. An investor agrees to loan the specified amount to a corporation. In return the corporation repays the investor back over a set amount of time and pays a specified interest rate.