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How come issuing bonds doesn't affect the control over the company?

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User Nikasv
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1 Answer

7 votes

Final answer:

Issuing bonds does not affect the control over the company because bondholders do not have voting rights or ownership in the company, unlike shareholders.

Step-by-step explanation:

When a company issues bonds, it is borrowing money from investors in exchange for promising to repay the principal amount with interest at a future date. However, issuing bonds does not affect the control over the company because bondholders do not have voting rights or ownership in the company, unlike shareholders. Even though the company is obligated to make interest payments to bondholders, it can still retain control over its operations and decision-making.

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User Shocks
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