Question

7. Corporations issue bonds in the middle of this virus outbreak because of the following reason. Which is the most important reason?

(1) To retain cash for daily operations

(2) To refinance debt

(3) To repurchase shares

(4) To fund mergers and acquisitions

Answer 1

As the most of businesses are suffering from economic slowdown and shutdown of business activities into most parts of the world. Therefore they are falling sort to retain cash for daily operations. The most of the countries easing debt financing by lowering the interest rates, therefore corporations issue bonds in the middle of this virus outbreak to retain cash for daily operations. Although some of them are issuing bonds for other purpose also like to refinance debt, repurchase shares and fund mergers and acquisitions.

Therefore most appropriate answer of this question is option: (1) To retain cash for daily operations