Theta Company has prepared to sell bonds with a stated rate of 6% when the market rate is 8%.These bonds will sell in the market at
A)par.
B)a discount.
C)a premium.
D)stated value.

Question

Quizplus · Accepted Answer

When the market rate is higher than the stated rate, bonds will sell at a discount. This is because investors can earn a higher rate of return in the market. Therefore, Theta Company's bonds will sell at a price lower than the face value, resulting in a discount.

Theta Company Has Prepared to Sell Bonds with a Stated