Answer:
a.higher than the market rate of interest
Explanation:
If bonds are issued at a premium, the stated interest rate is higher than the market rate of interest.
- If the company issues the binds at a premium, it means that the company is getting more money than the face value of the bond.
- This happens because the demand for the bind is high in the market.
- The demand is high because the company offers higher interest rate as compared to market interest rate.
- If the bonds are issued at a discount, then the stated interest rate is lower than the market interest rate.
