IIA Exam IIA-CIA-Part3-3P Topic 9 Question 41 Discussion

Actual exam question for IIA's IIA-CIA-Part3-3P exam

Question #: 41
Topic #: 9

[All IIA-CIA-Part3-3P Questions]

Which of the following is true of bond financing, compared to common stock, when all other variables are equal?

ALower shareholder control.

BLower indebtedness.

CHigher company earnings per share.

DHigher overall company earnings.

Show Suggested Answer

Suggested Answer: B

by Staci at Apr 21, 2024, 12:24 AM

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Bok

5 days ago

Hmm, if I had to guess, I'd say C is the correct answer. Bond financing typically results in higher earnings per share, since the interest payments are deductible.

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Makeda

12 days ago

But wouldn't bond financing lead to higher indebtedness, making B) a more likely answer?

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Telma

14 days ago

I disagree, I believe it's C) Higher company earnings per share.

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Makeda

17 days ago

I think the answer is A) Lower shareholder control.

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