The reason for a firm gives preference to finance its investments through bonds than stocks and vice-versa.

Question

Suppose that in a given bond market, there is currentlyno information that can help potential bond buyers todistinguish between bonds. Which bond issuers havean incentive to disclose information about their companies? Explain why

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Chapter 23, Problem 5QFR

To determine

To explain:

The reason for a firm gives preference to finance its investments through bonds than stocks and vice-versa.

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