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If a company issues $15,000,00 worth of bonds with a face interest rate higher than the...

If a company issues $15,000,00 worth of bonds with a face interest rate higher than the market interest rate, the bonds will sell at an amount

1 less than $15,000,000.

2 equal to $15,000,000.

3 greater than $15,000,000.

4 that can’t be determined from the information provided in the problem.

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Answer #1

As we now the re bond interest rate market rate and bond price are all related to each other .

If bond interest rate is more than market interest rate bond will be issued at premium .Simply because bond is providing return greater than market.

On other hand if bind interest rate is less than the market interest rate it will be issued at discount. Because if it isnt no investor will buy as market is providing higer rate.

If a company issues $15,000,00 worth of bonds with a face interest rate higher than the market interest rate, the bonds will sell at an amount ""greater than $15,000,000.""" That is it will issued at premium

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