Given the Following Bond Information

question 67

Multiple Choice

Given the following bond information:
What would be the taxable income on this bond if it were purchased at this price on June 1st and sold December 1st for a price of 103.00 and has face value of $20 000 and a semi-annual coupon payment?

• A)Taxable capital gain of $800 and interest of $630.
• B)Taxable capital gain of $400 and interest of $315.
• C)Taxable capital gain of $1600 and interest of $656.
• D)Taxable capital gain of $200 and interest of $157.50.

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Definitions:

Segment Revenues

The income generated from specific divisions or operational units within a company, allowing for the analysis of each segment's contribution to the overall revenue.

Operating Expenses

Costs associated with running a business's core operations excluding the cost of goods sold, such as rent, utilities, and payroll.

Reportable Segments

This refers to distinct components of a business for which separate financial information is available and is regularly reviewed by the company's decision-makers.

Interest Revenue

Income earned by a company from its lending activities or from holding interest-bearing financial assets.