Question

Which of the following statements about bond premiums or discounts is correct?

A) A discount on a bond reduces the amount that the issuer has to repay to the lenders.

B) A premium on a bond increases the interest expense of the loan to the issuer.

C) A premium on a bond increases the amount that the issuer has to repay to the lenders.

D) A discount on a bond increases the interest expense of the loan to the issuer.

Answer

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