What Does It Mean for a Bond to Sell at a Premium

question 171

Multiple Choice

What does it mean for a bond to sell at a premium?

• A)The yield to maturity is above the coupon rate.
• B)The bond has an exceptionally good credit rating.
• C)The bond rating is above investment grade.
• D)The bond sells for more than par value.

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Definitions:

Consolidated Goodwill

An intangible asset that appears when a parent company acquires a subsidiary and is recorded after consolidation processes.

Acquisition Transaction

An acquisition transaction is a business deal in which one company purchases most or all of another company's shares to take control.

Stockholders' Equity Figures

The total value of a company's equity that belongs to shareholders, calculated as total assets minus total liabilities.

Separate Corporate Existence

The legal principle that a corporation exists independently from its owners, with its own rights, liabilities, and obligations.