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1.Mack Pharmaceutical issued bonds at a premium. Which of the statements below is true ofthe premium? a.It will increase bond interest expense throughout the bond

1.Mack Pharmaceutical issued bonds at a premium. Which of the statements below is true ofthe premium?

a.It will increase bond interest expense throughout the bond term. b.It represents a reduction in the cost of borrowing.

c.It is an extra payment the bond issuer must pay to the bond investors.

d.It is a reduction of the interest payments the bond issuer must pay to bond investors.

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