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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.
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...