What is a disadvantage of issuing bonds?

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2026-08-15 16:25

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A disadvantage of issuing bonds is that it increases a company's debt burden, leading to higher financial risk and potentially impacting its credit rating. Additionally, bond issuers are required to make regular interest payments, which can strain cash flow, especially during economic downturns. If a company struggles to meet these obligations, it could face default, harming its reputation and future borrowing ability.

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