The par or face value of a debenture is:
A)The amount that debenture holders will receive on maturity of the debenture.
B) The amount that a debenture holder would be prepared to pay for a debenture when the coupon rate is below the interest rate the debenture holder considers appropriate.
C) The amount debenture holders will receive annually until the debenture matures.
D) The amount that a debenture holder would be prepared to pay for a debenture when the coupon rate is above the interest rate the debenture holder considers appropriate.
E) None of the given answers.

Question

The par or face value of a debenture is: 
A)The amount that debenture holders will receive on maturity of the debenture.
B) The amount that a debenture holder would be prepared to pay for a debenture when the coupon rate is below the interest rate the debenture holder considers appropriate.
C) The amount debenture holders will receive annually until the debenture matures.
D) The amount that a debenture holder would be prepared to pay for a debenture when the coupon rate is above the interest rate the debenture holder considers appropriate.
E) None of the given answers.

Quizplus · Accepted Answer

The par or face value of a debenture is the nominal or principal amount that the issuer of the debenture promises to pay to the debenture holders on the maturity date of the debenture, i.e., it is the amount that debenture holders will receive on maturity of the debenture.

The Par or Face Value of a Debenture Is