Which of the following statements about bond premiums or discounts is correct?
A. A premium on a bond increases the amount that the issuer has to repay to the lenders.
B. A discount on a bond reduces the amount that the issuer has to repay to the lenders.
C. A discount on a bond increases the interest expense of the loan to the issuer.
D. A premium on a bond increases the interest expense of the loan to the issuer.
Answer: C
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