Consider the following statement: "Issuing bonds at a discount is bad for the issuing company." Discuss the statement and comment on its validity.

The issuance of bonds at a discount is not bad (nor is the issuance of bonds at a premium good).Proceeds from a bond are determined based on prevailing rates of interest at the time the bonds are issued.When bonds are issued at a discount,the market rate exceeds the coupon rate.When bonds are issued at a premium,the coupon rate exceeds the market rate.The price at which bonds are issued simply adjusts the selling price to yield the market rate to the bondholders.