Asked by Aliya leblanc on Jun 28, 2024
Verified
If a corporation issued bonds at an amount less than face value it indicates that the corporation has a weak credit rating.
Face Value
The nominal or original value of a security or currency as stated by the issuer, not necessarily its market value.
Credit Rating
An assessment of the creditworthiness of a borrower, either a business or a governmental entity, reflecting their ability to repay borrowed money.
- Familiarize yourself with the mechanisms of bond issuance and redemption, and understand their repercussions on the financial condition and credit rating of a company.
Verified Answer
TS
Tanya SainiJul 02, 2024
Final Answer :
False
Explanation :
If a corporation issues bonds at an amount less than face value, it means they are offering a discount or selling the bond at a lower price to entice investors. This does not necessarily indicate that the corporation has a weak credit rating.
Learning Objectives
- Familiarize yourself with the mechanisms of bond issuance and redemption, and understand their repercussions on the financial condition and credit rating of a company.