If Bonds Are Issued at a Premium the Carrying Value

question 62

True/False

If bonds are issued at a premium the carrying value of the bonds will be greater than the face value of the bonds for all periods prior to the bond maturity date.

---

Definitions:

Poison Pill

A defensive strategy used by corporations to deter hostile takeovers by making the company less attractive to the potential acquirer.

Control

In a business context, the ability to direct the management and policies of a company, often through the ownership of a majority of shares.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, thus having partial ownership and interest in the company.

Shares

Units of ownership interest in a corporation or financial asset, which provide for an equal distribution in any profits, if any are declared, in the form of dividends.