zero coupon bond
I thought A is correct. Since it does not pay any interest , I thought net income is overstated for zero coupon bond. Appreciate any comments on the question.
Which of the following best describes how issuing zero-coupon bonds affects a company’s financial statements? The company’s:
A. net income is overstated every year until maturity.
B. cash flow from operations decreases for the life of the bond.
C. cash flow from investing decreases during the year of maturity.
D. cash flow from financing increases during the year of issuance.
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