0
One or more of the following market conditions may explain why a bond is selling at a premium (to face value):
* Interest rates went down (causing value to go up)
* The credit rating for the company issuing the stock went up
* The company issuing the bonds has offered to buy outstanding debt at a premium
* If convertible bond (to stock), the underlying stock went above a critical value making the bond more valuable when converted
What else can I help you with?
When a bond is selling for more than its par value it is selling at a?
Premium
If a bond is selling more than its face value its selling at a what?
Premium.
What does it mean went a bond is issued at a premium?
When a bond is issued at a premium, it means that the bond's selling price is higher than its face value or par value. This typically occurs when the bond’s coupon rate is higher than the prevailing market interest rates, making it more attractive to investors. As a result, investors are willing to pay more for the bond to receive the higher interest payments. The premium is amortized over the life of the bond and reduces the effective yield for the investor.
What happens when a bond is issued at a premium?
When a bond is issued at a premium, it means the bond's selling price is higher than its face value. This typically occurs when the bond's coupon rate is higher than prevailing market interest rates, making it more attractive to investors. As a result, the issuer receives more funds upfront, but the premium will be amortized over the bond’s life, reducing the interest expense recognized on the issuer's financial statements. Ultimately, the bondholder will receive the face value at maturity, resulting in a loss of the premium amount.
When a bond is selling for more than its face value it's selling at a?
If a bond's price is greater than its Face Value, it is said to be "in premium" e.g. if the price is 105 with a FV of only 100. If the market price is below the Face Value, it is said to be "in discount" while should the market price equal the FV, the bond is said to be "at par".
When a bond is selling for more than its par value it is selling at a?
Premium
If a bond is selling more than its face value its selling at a what?
Premium.
How do you find out if you have won with a Premium Bond if you have lost the Premium Bond information?
I HAVE LOST THE PREMIUM BOND INFORMATION
When was Premium Bond created?
Premium Bond was created in 1956.
What does it mean went a bond is issued at a premium?
When a bond is issued at a premium, it means that the bond's selling price is higher than its face value or par value. This typically occurs when the bond’s coupon rate is higher than the prevailing market interest rates, making it more attractive to investors. As a result, investors are willing to pay more for the bond to receive the higher interest payments. The premium is amortized over the life of the bond and reduces the effective yield for the investor.
What happens when a bond is issued at a premium?
When a bond is issued at a premium, it means the bond's selling price is higher than its face value. This typically occurs when the bond's coupon rate is higher than prevailing market interest rates, making it more attractive to investors. As a result, the issuer receives more funds upfront, but the premium will be amortized over the bond’s life, reducing the interest expense recognized on the issuer's financial statements. Ultimately, the bondholder will receive the face value at maturity, resulting in a loss of the premium amount.
When a bond is selling for more than its face value it's selling at a?
If a bond's price is greater than its Face Value, it is said to be "in premium" e.g. if the price is 105 with a FV of only 100. If the market price is below the Face Value, it is said to be "in discount" while should the market price equal the FV, the bond is said to be "at par".
When the market rate of return for a particular bond is much less than its coupon rate the bond is selling at?
If the current interest rate is lower than the coupon rate, a bond will be priced at a premium. For example, a bond originally issued at par with a 5% coupon would initially yield 5% to an investor. If market rates subsequently dropped to 3%, the bond would be selling at a premium to reflect the lower interest rate. In this example, the original bond sold for $1,000 and had a coupon rate of 5% to yield $50 per year in interest. If interest rates dropped to 3%, the price of the bond would increase to approximately $1,667. A purchaser of the bond would still receive $50 per year in interest which would provide an annual yield of 3% ($50/$1,667 = 3.0%).
How does a premium savings bond work?
A premium savings bond is simply a bond which trades at a coupon rate that is higher than the prevailing interest rate. This increased coupon rate will cause the bond to mature faster than it otherwise would.
Does a T-Bond have a default risk premium?
yes
How long is premium bond cheque valid?
3 months
Does the yield to maturity on a premium bond exceed the bond's coupon rate?
No, the yield to maturity (YTM) on a premium bond does not exceed the bond's coupon rate. A premium bond is sold for more than its face value, which means the YTM will be lower than the coupon rate because the investor will receive the fixed coupon payments but will incur a loss when the bond matures and is redeemed at face value. Thus, the YTM reflects this lower return compared to the coupon rate.
