State the advantages of issuing bonds instead of stock

Question

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Answer 1

Question

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.

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Students have asked these similar questions

Palladium, Incorporated recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold $ 67,000 Work-in-Process Inventory, Beginning 11,300 Work-in-Process Inventory, Ending 9,400 Selling and Administrative Expense 16,000 Finished Goods Inventory, Ending 16,100 Finished Goods Inventory, Beginning ?question mark Direct Materials Used ?question mark Factory Overhead Applied 12,400 Operating Income 14,220 Direct Materials Inventory, Beginning 11,180 Direct Materials Inventory, Ending 6,140 Cost of Goods Manufactured 61,880 Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The Chief Financial Officer of Palladium, Incorporated has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount in the finished goods inventory at the beginning of the year?

Which of the following statements is incorrect regarding manufacturing overhead? Multiple Choice Manufacturing overhead includes both fixed and variable costs. Manufacturing overhead is an indirect cost to units or products. Actual overhead costs are used in the cost accounting process. Actual overhead costs tend to remain relatively constant over various output levels.

Palladium, Incorporated recently lost a portion of its records in an office fire. The following information was salvaged from the accounting records. Cost of Goods Sold $ 72,500 Work-in-Process Inventory, Beginning 13,500 Work-in-Process Inventory, Ending 10,500 Selling and Administrative Expense 18,750 Finished Goods Inventory, Ending 19,125 Finished Goods Inventory, Beginning ?question mark Direct Materials Used ?question mark Factory Overhead Applied 13,500 Operating Income 14,825 Direct Materials Inventory, Beginning 11,675 Direct Materials Inventory, Ending 6,525 Cost of Goods Manufactured 67,050 Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. The Chief Financial Officer of Palladium, Incorporated has asked you to recalculate the following accounts and to report to him by the end of the day. What is the amount of direct materials purchased?

Answer 2

Question

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.

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Answer 3

Question

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.

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Answer 4

Question

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.

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Answer 5

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.

Answer 6

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.

Answer 7

Chapter 10, Problem 1Q

To determine

State the advantages of issuing bonds instead of stock

Answer 8

Expert Solution & Answer

Explanation of Solution

Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from investors to raise fund for financing the operations.

Stock: It refers to a security issued in a form of certificate and implies the right of ownership of an investor over a portion of company’s earnings and assets.

Some advantages of issuing bonds instead of stock are as follows:

Issue of bonds is less expensive than issue of shares.
The interests on bonds are tax deductible. However, dividends from shares are not tax deductible.
Issue of bonds does not affect the percentage of ownership of an investor in the company.
Stockholders’ control is not affected in the bonds.
Earnings per share of bonds are high compare to common stock.