Which of the Following Statements Regarding Bond Discounts or Premiums

question 4

Multiple Choice

Which of the following statements regarding bond discounts or premiums is true?

• A) discount on a bond reduces the amount that the issuer has to repay to the lenders.
• B) premium on a bond increases the interest expense of the loan to the issuer.
• C) premium on a bond increases the amount that the issuer has to repay to the lenders.
• D) discount on a bond increases the interest expense of the loan to the issuer.

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Definitions:

Efforts

Initiatives or exertions of physical or mental energy towards achieving specific objectives.

Profit-Sharing Programs

Compensation schemes where employees receive a share of the company's profits, usually in addition to their regular salary.

Reward System

A structured scheme for the distribution of benefits, such as money, benefits, or recognition, to individuals based on their contributions to organizational or group objectives.

Perceived

Regarded in a certain way based on the interpretation or impression of the observer.