Zero Coupon Bond

From Mock 1, The presence of zero (deferred) coupon bonds in the debt structure can impair the company’s ability to improve its credit quality in the future as a burden is placed on future cash flows to meet the deferred interest obligation…why does it consider less interest paid as a positive for the firm?

Its not paying less interest, it is deferring it until maturity…so there is a large cash flow out in the future.