Economics · Economy
From an issuer's perspective, what is a key advantage of utilizing deep-discount bonds to raise large-scale capital?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1They guarantee that the market value of the bond will never fluctuate.
- 2They offer a mechanism to raise capital without the burden of periodic interim interest payments.✓
- 3They eliminate the principal repayment obligation upon reaching maturity.
- 4They mandate high monthly cash outflows to service interest requirements.
Correct answer
They offer a mechanism to raise capital without the burden of periodic interim interest payments.
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