Question

Sin Qua Corporation is a company listed on the stock exchange and issues corporate bonds. Which statement is most likely true?

Answer 1

B. Investors will have to pay tax on the interest income received from the bonds.

Explanation:

Investors will have to pay tax on the interest income received from the bonds because it is a taxable income.

The interest earned from a corporate bond is subject to taxation by both the federal and state governments.

Again, the maturity of the bond is determined at the time they are issued. Creditworthiness will only affect the bond price but not its maturity period.