Question

A corporation's total stockholders' equity will be increased if a corporation issues 30-year bonds for a price greater than the par value (face value) of the bonds.

state true or false

Answer 1

False. The total stockholders' equity will not be increased if a corporation issues 30-year bonds for a price greater than the par value (face value) of the bonds.

Step-by-step explanation:

False. The total stockholders' equity will not be increased if a corporation issues 30-year bonds for a price greater than the par value (face value) of the bonds.

Stockholders' equity represents the residual interest in the assets of a corporation after deducting liabilities. When a corporation issues bonds, it incurs a liability to repay the bondholders. The price paid for the bonds does not affect the stockholders' equity, but rather represents the debt owed by the corporation.