Which of the following statements is TRUE about a debenture that is issued at a premium?
A)Its interest rate is lower than the prevailing market rate.
B)It will repay principal at more than the face value.
C)It will be sold at par.
D)It will be sold above par.

Question

Quizplus · Accepted Answer

A debenture issued at a premium means that it is sold at a price above its par value. The premium represents the amount above the face value that the investor agrees to pay for the bond. Therefore, the debenture will be sold above par.

Which of the Following Statements Is TRUE About a Debenture