Ask Question
BusinessBusiness
2 November, 23:00

Which of the following statements is true of a bond that is issued at a premium?

A. At maturity, the bond will repay an amount that is greater than the face value.

B. The bond will be issued at par.

C. The stated interest rate is lower than the prevailing market interest rate.

D. The bond will be issued at an amount above face value

+5
Answers (1)
  1. 2 November, 23:28
    0
    D. The bond will be issued at an amount above face value

    Explanation:

    A premium bond trades at a price above its face value. For example, if the face value of a bond is $5000, but it is selling at a price above $5000, then it is a premium bond. At maturity, a bond bought at a premium will be paid the face value and not the premium value.

    Bond's interest rates are constant until maturity. Demand for a particular bond may drive its price higher. If investors expect the interest returns from the bond to be higher than the market interest payments, such a bond will trade at a premium.

    The bond that sells at a lower price than the face value is discount bond.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Which of the following statements is true of a bond that is issued at a premium? A. At maturity, the bond will repay an amount that is ...” 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
Consider a change to the tax law that allows a company to increase its depreciation charges. According to the static theory of capital structure, the optimal level of debt should be lower than it was before the change. True or False?
Answers (1)
In 2017, Eraser Corp had Revenue of $200 million, Cost of Goods Sold of $100 million (this includes Depreciation of $50 million), Sales General and Admin Expenses of $50 million, and faced a tax rate of 21%.
Answers (1)
During its most recent fiscal year, Raphael Enterprises sold 380,000 electric screwdrivers at a price of $20.40 each. Fixed costs amounted to $1,444,000 and pretax income was $1,824,000.
Answers (1)
In 1980 Denmark had a GDP of $70 billion (measured in U. S. dollars) and a population of 5.1 million. In 2000, Denmark had a GDP of $160 billion (measured in U. S. dollars) s and a population of 5.3 million.
Answers (1)
The allowance for bad debts account has a credit balance of $8,000 before the adjusting entry for bad debts expense.
Answers (1)
New Questions in Business
Units to be Assigned Costs Oak Ridge Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet.
Answers (1)
Select all the correct answers Amber is writing to an accountant that she would like to interview to gain information about the career field. What information should she include in her letter? A.
Answers (2)
What is the acid-test ratio for a merchant with the following account balances? (Round your answer to two decimal places.
Answers (2)
When the market fails to adjust for the full costs of a firm's behavior, this is called?
Answers (1)
What is the basic formula of the malthus theorem?
Answers (1)
Home » Business » Which of the following statements is true of a bond that is issued at a premium? A. At maturity, the bond will repay an amount that is greater than the face value. B. The bond will be issued at par. C.
Sign Up Forgot Password?