Which of the Following Statements Concerning Bond Features Is (Are)correct

question 128

Multiple Choice

Which of the following statements concerning bond features is (are) correct?
I.Bondholders generally have voting power in a corporation.
II.Bond interest is tax-deductible as a business expense.
III.The repayment of the bond principal is tax-deductible.
IV.Failure to pay either the interest payments or the bond principle as agreed can cause a firm to go into bankruptcy.

• A)II only
• B)I and II only
• C)III and IV only
• D)II and IV only
• E)II, III, and IV only

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Definitions:

Social Security Tax

Taxes collected to fund the Social Security program, providing benefits for retirees, the disabled, and children of deceased workers.

Federal Income Tax

A tax levied by the United States Internal Revenue Service on the annual earnings of individuals, corporations, trusts, and other legal entities.

Federal Unemployment Tax

This is a tax paid by employers based on the wages paid to employees, intended to fund state workforce agencies.

Employer's Payroll Tax

Taxes that employers are required to pay on behalf of their employees, such as social security and Medicare taxes in the United States.