Home > Term: call premium
call premium
Amount above the par value of a bond that its issuer must pay to the holders if the bond is redeemed before its maturity date. Call premium usually declines with the years of the bond's issue date; it is higher for bonds called after 5 years than for those called after 10 years. It compensates the bond holder for disruption in interest earnings, and for the effort to reinvest funds.
- Part of Speech: noun
- Industry/Domain: Accounting
- Category: General accounting
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- anton.chausovskyy
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