A debenture will be issued at par value:
A) Because that is the offer price. If the rate offered is too low the offer will be under-subscribed, so those who take it up will receive more interest.
B) On most occasions, because management is careful to issue the debentures at an amount close to the market rate.
C) On those rare occasions when the coupon rate is the same as the market rate.
D) On those occasions when the offer rate is equal to the coupon rate.
E) None of the given answers.

Question

Quizplus · Accepted Answer

A debenture is issued at par value when the coupon rate is the same as the market rate, ensuring that the debenture is priced at its face value.

A Debenture Will Be Issued at Par Value