Bonds are issued at a premium when the:
A)proceeds from the issuance of the bonds are greater than the face value of the bonds
B)market rate of interest is lower than the face rate of interest on the bonds
C)face rate of interest on the bonds is equal to the market rate of interest
D)both a and b are correct

Question

Quizplus · Accepted Answer

Bonds are issued at a premium when the proceeds from the bond issuance exceed the face value (A), which typically happens when the market interest rate is lower than the bond's coupon rate (B), making both A and B correct.

Bonds Are Issued at a Premium When The