Hoops Incorporated issues 9%, 20-year bonds with a par value of $1,000,000 and semiannual interest payments. If the market rate for bonds is 10% at the time of issuance, then the bonds are issued at a premium.

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A disadvantage of bond financing versus equity financing is that bonds require payment of both periodic interest and the par value at maturity, while equity does not require payments.

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The holder of a bearer bond is presumed to be the bonds rightful owner.

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The par value of a bond, or face value, is paid at a stated future date called the maturity date.

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