Multiple Choice
Selling the bonds at a premium has the effect of
A) raising the effective interest rate above the stated interest rate.
B) attracting investors that are willing to pay a lower rate of interest than on similar bonds.
C) causing the total cost of borrowing to be higher than the bond interest paid.
D) causing the total cost of borrowing to be lower than the bond interest paid.
Correct Answer:
Verified
Correct Answer:
Verified
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