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If a company issues bonds at a premium, the investor will pay More Less then the face amount, to buy the bond. If a company
If a company issues bonds at a premium, the investor will pay | ||||||||
More | Less | then the face amount, to buy the bond. | ||||||
If a company issues bonds at a discount, the investor's yield to maturity on the | ||||||||
bonds will be | More | Less | than the coupon interest rate | |||||
if they hold the bonds until the maturity date. | ||||||||
Company F issues one bond to an investor at a price of $1,010. The bond pays 5% interest | ||||||||
annually. | ||||||||
Does the bondholder earn More, or Less, than 5% on their investment, if they hold the | ||||||||
bond to the maturity date? | More | Less | ||||||
List some reasons a company's bonds might not sell at par ($1,000 per bond) on the day | ||||||||
the bond issue closes. | ||||||||
1 | ||||||||
2 | ||||||||
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