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In their simplest form, bonds are issued by companies in order to increase cash for long-term...

In their simplest form, bonds are issued by companies in order to increase cash for long-term development plans such as growing the business, constructing new capital assets, or opening new stores in developing geographical areas.

A.) true

B.) false

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Answer #1

Answer: - True

Explanation:-  Bonds are basically an external financing tool, for procuring cash from the market in order to finance its long-term development plans such as growing the business, constructing new capital assets, or opening new stores in developing geographical areas. The company only have to pay interest for a long period until the bonds are matured. So the company can focus on its investment plans and procure enough cash for this via bond issue. The holder (buyer of bonds) of bonds receive the fixed coupon payments along with the maturity value at redemption.

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