Multiple Choice
ABC Company is in the process of issuing bonds.The bonds have a stated interest rate of 6%,which is 2% above the current market rate.What effect will the two interest rates have on the bond issue price?
A) The issue price will be above the bond's face value.
B) The issue price will be below the bond's face value.
C) The issue price will equal the bond's face value.
D) Cannot determine without knowing the face value.
Correct Answer:
Verified
Correct Answer:
Verified
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