Answer:
Bonds pay periodic interest and the repayment of par value at maturity.
Explanation:
The main disadvantages that businesses face when issuing bonds are:
- bonds pay coupons either semiannually or annually, and the company needs to have the money to pay them
- bonds increase the risk of insolvency, AKA bankruptcy, which increases the cost of equity
- since bonds require interest payments (coupons), they can potentially decrease return on equity
