Which of the following statements is true? multiple choice
1. dividends to stockholders are tax deductible.
2. interest on bonds is not tax deductible.
3. bonds do not have to be repaid.
4. interest on bonds is tax deductible.
5. bonds always increase return on equity

2) Interest on bonds is not tax deductible.

Explanation:

When an individual or a business earns interest from a bond, that interest will be taxed. Some types of bonds are tax free, for example municipal bonds don't pay federal income taxes but may result in state taxes. While interest earned in Us securities is taxable under federal income but not state income.

Interest on bonds may be tax free on certain circumstances, but they are never tax deductible.

answer; operating revenues;

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