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A debenture will be issued at par value: because that is the offer price; if the rate offered is too low the offer will be
A debenture will be issued at par value:
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. | ||
on most occasions, because management is careful to issue the debentures at an amount close to the market rate. | ||
on those rare occasions when the coupon rate is the same as the market rate. | ||
on those occasions when the offer rate is equal to the coupon rate. |
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