Which of the Following Is an Example of the Conversion

question 133

Multiple Choice

Which of the following is an example of the conversion strategy?

• A)A corporation paying its shareholders a $20,000 dividend.
• B)A corporation paying its owner a $20,000 salary.
• C)A high tax rate taxpayer investing in tax exempt municipal bonds.
• D)A cash-basis business delaying billing its customers until after year end.
• E)None of the choices are correct.

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Definitions:

Yield

The income return on an investment, such as the interest or dividends received from holding a particular security.

Price

The amount of money required to purchase a good, service, or asset.

Coupon

Represents the interest payment that a bond issuer owes to the bondholders, typically expressed as an annual percentage of the bond's face value.

Bond B

Refers to a specific class or series of bond, which may be characterized by its rank, terms, issuing entity, or other defining features.