Regarding the issue of stock


Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

  • The issuance of stock decreases several important financial ratios.
  • Issuing bonds dilutes the voting power of the stockholders.
  • Corporations are not required to return the investment to the stockholders.
  • Investors expect to earn a higher rate of return on stocks than bonds

 

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Accounting Basics: Regarding the issue of stock
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