Malfoy issued 10-year bonds with a maturity value of $600 million. Which of the following statements is...
Malfoy issued 10-year bonds with a maturity value of $600 million. Which of the following statements is true if the bonds were issued at a premium?
| a. |
The yield rate of interest exceeded the coupon rate |
|
| b. |
The cash rate of interest exceeded the coupon rate |
|
| c. |
The yield rate of interest was less than the coupon rate |
|
| d. |
The yield rate of interest was greater than the rate on equivalent risk-rated bonds |
Homework Answers
Answer : C) The Yield rate of Interest was Less than the Coupon rate
Bond Proceeds are Depends on the Bond Yield rate and the Bond Coupon rate
If the Bond Coupon rate is More than the Bond yield the bond will issued at premium .
If the Bond coupon rate is less than the Bond yield the bond will issued at Discount
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