If a corporation plans to issue $1,000,000 of 5% bonds at a time when the market rate

Question:

If a corporation plans to issue $1,000,000 of 5% bonds at a time when the market rate for similar bonds is 4%, the bonds can be expected to sell at:

a. their face amount.

b. a premium.

c. a discount.

d. a premium or discount.

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