What are the advantages of Bonds to the Issuer ?

LOW FUND COST - BONDS HOLDER HAVE NOT WRIGHT TO PROFITS DIVIDENS 

The advantage of bonds to the issuer are :

1) Interest paid on debt is tax deductible.

2) Basic control of the firm is not shared with debt holders.

1- a good financing method without effect on the number of shares

2- the interest rate is mostly less than dividends and eps

• By issuing bonds corporations attract wide range of investors

• Interest payments to bond investors are less then what its paid to lenders such as banks

• Reduced financial restriction on credit.Banks often restrict lend amount in form of loans or overdrafts whereas by issuing bond there is no financial constraints.Wide range of investors can be attracted

• Time limits.Favorable time limits of repayment to investors then Banks

1)Bonds are less riskier than shares and therefore the bond holders requires less interest on the bonds as compared to the shares..

2)interest paid on bonds are deductible in computing tax

3)the issuer  know when he is going to pay back the money..this will help the issuer in taking good decisions..

It strengthens the financial matter of the issuer coz it it is the safe way of raising fund.