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Is interest paid on deep disc bonds?and as it cannot be issued at a discount to nominal vlues,is it more than $100?
Yes, but very low interest.
Bonds can be issued at a discount to nominal value (it is shares that cannot be).
So that is why the interest is very low. If you issued $100 bonds at only $60 (a big discount) but repayable at the full $100, then there is such a big gain on repayment that the investor will accept a very low rate of interest.
But in the bpp kit it says bonds cannot be issued at a discount due to which I was confused
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