Ask Question
BusinessBusiness
23 September, 13:22

Bonds are sold at a premium if the: Group of answer choices Company will have to pay a premium to retire the bonds Issuing company has a better reputation than other companies in the same business Market rate of interest was less than the face rate at the time of issue Market rate of interest was more than the face rate at the time of issue

+2
Answers (1)
  1. 23 September, 13:41
    0
    Market rate of interest was less than the face rate at the time of issue

    Explanation:

    Bonds represent debt instruments whereby the borrower raises long term finance agreeing to pay the lender a fixed amount of coupon payments periodically as well as principal repayment upon redemption.

    The market rate of interest or yield to maturity of a bond represents the expectation of bond holders as it is the rate of return earned on similarly priced bonds by the investors in the market.

    In case the issuer issues bonds wherein the coupon rate of payment is greater than the market rate of interest, such bonds are referred to as bonds priced at a premium. Since yield to maturity rate is inversely related to bond price. Higher the yield to maturity, lower would be the price of bonds and vice versa.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Bonds are sold at a premium if the: Group of answer choices Company will have to pay a premium to retire the bonds Issuing company has a ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Welch Corporation is planning an investment with the following characteristics (Ignore income taxes.) : Useful life 7 years Yearly net cash inflow $ 90,000 Salvage value $ 0 Internal rate of return 11 % Required rate of return 7 % Click here to view
Answers (1)
Which of the following is NOT a reason a seller would rate a transaction as valuable? Select one: a. The transaction makes a seller prestigious among the competition b. The transaction allows a seller to take pride in its product c.
Answers (1)
Are groups of nominated or elected employees who must be consulted when management makes decisions involving employee issues.
Answers (1)
Which of these does NOT act as a monitor of how the firm is being run outside the firm? Multiple Choice auditors credit rating agencies members of the board of directors analysts
Answers (2)
What is the purpose of total quality management, defined as the principle that every member of staff must be committed to maintaining high standards of work in every aspect?
Answers (1)
New Questions in Business
Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000, of whom 1,800 work 6 hours a day to make 270,000 final goods. a.
Answers (1)
Thirty-two new employees from Market Enterprises are attending orientation, receiving information about company policies, and filling out various forms. These employees comprise a group. 1. True2. False
Answers (1)
Which of the following statements is true? a. The required return on a firm's common stock is, in theory, determined solely by its market risk.
Answers (1)
Jack is preparing for a party and makes potato salad, but he does not realize that the salad contains one escherichia coli bacterium. he accidentally leaves the salad out of the refrigerator for 2 hours. if e.
Answers (1)
You feel that you will need $2.8 million in your retirement account and when you reach that amount, you plan to retire. You feel you can earn an APR of 10.8 percent compounded monthly and plan to save $395 per month until you reach your goal.
Answers (1)
Home » Business » Bonds are sold at a premium if the: Group of answer choices Company will have to pay a premium to retire the bonds Issuing company has a better reputation than other companies in the same business Market rate of interest was less than the face rate
Sign Up Forgot Password?