What is a primary advantage of issuing bonds for a corporation?

Issuing bonds provides a significant advantage to a corporation by offering secured funding with fixed repayment terms. When a corporation issues bonds, it is essentially borrowing money from bondholders at a fixed interest rate for a set period of time. This structure allows the corporation to plan its finances more reliably because it knows in advance what its repayment obligations will be.

Unlike selling equity, which dilutes ownership and may change management dynamics, bonds enable a corporation to raise capital without affecting the ownership structure. Additionally, bond interest payments are generally tax-deductible, providing further financial leverage to the issuing corporation. This can lead to lower overall costs of capital compared to other forms of financing. Furthermore, once the bond reaches maturity, the corporation is required to pay back the principal amount to the bondholders, ensuring a clear timeline for repayment.

In contrast to the other options presented, the advantages of bonds do not involve altering ownership stakes or introducing voting rights into corporate governance, thus maintaining focus on financial strategy and capital structure.