Question

A corporation that wishes to borrow from the general public rather than a bank will issue

a) notes payable.
b) common stock.
c) preferred stock.
d) bonds.

Answer 1

A corporation that wishes to borrow from the general public rather borrow from a bank will issue bonds, allowing it to raise capital while maintaining company control. So, the correct answer is option d.

Step-by-step explanation:

When a corporation wishes to borrow from the general public rather than from a bank, it typically issues bonds. This option allows the firm to raise capital while maintaining control of its operations without being subject to shareholders as it would if it issued stock.

Bonds require scheduled interest payments regardless of the company's income level. On the contrary, issuing common stock or preferred stock involves selling ownership in the company and is accompanied by different financial obligations and control considerations. Therefore, to answer the student's question, the correct option is d) bonds.