Question
Baldwin Co. is considering whether to retire (pay-off) their $10,000,000 long-term bond early. The company is current on (i.e. has paid all) required interest payments
Baldwin Co. is considering whether to retire (pay-off) their $10,000,000 long-term bond early. The company is "current on" (i.e. has paid all) required interest payments per their bond contract. This bond had a closing (close) market price of 95 at the end of the year (this would be shown on pg 2 of the Bond Market Report).
Note: The bond market is similar to the stock market. Bonds (debt) is traded (bought and sold) among investors every day.
Question: Based upon the facts presented, and your coverage of Bonds in Acct 2210, does this bond's closing (close) price indicate a Discount or a Premium is present?
Group of answer choices
A.This bond is trading at a "discount".
B.This bond is trading at a "premium".
C.This bond is neither trading at a "discount" or a "premium".
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