The call premium is:

A) Equal to the par value but paid prior to maturity.
B) Additional compensation paid to a bondholder in exchange for an early redemption.
C) The 'thou shalts' that must be met prior to the payment of the face value at maturity.
D) The additional principal paid when a bond is granted an investment grade rating.
E) The same as the face value but paid prior to maturity.

Call Premium

The amount by which the price of a call option exceeds its intrinsic value; essentially, the extra cost for the right to buy a stock at a set price.

Early Redemption

The process of repaying a debt or obligation before its official due date, which may involve a penalty or premium.

Bondholder

An investor or owner of bond securities who has lent money to the issuing entity, such as a corporation or government.