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What is the tax advantage when bonds are issued instead of stock?

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Question added by Mujtaba Hussain , Accounts officer , Miraj Entertaiments
Date Posted: 2014/04/16
Abhishek Banerjee
by Abhishek Banerjee , Work Assistant , Andaman Lakshadweep Harbour Works

The tax advantage of issuing bonds (or other debt) instead of stock results from the interest paid by the company being a deductible expense on its federal and state income tax returns. Dividends paid to stockholders are not a deductible expense, since dividends are a distribution of profits to the owners of the corporation.

Asad zaman
by Asad zaman , Audit/Finance , Rafaqat Baber and co

cuz, issue cost of bonds might be tax deductable

interest cost is tax deductable too...

WAAC of a company is lower due to bond element in total long term base(Equities+long tern debt) of an organization...

 

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