If a bond is called early at a call price of \$1,020, what does this mean for the bondholder?

• A. The bondholder will receive interest payments for the remaining term of the bond.
• B. The bondholder will receive \$1,020 per bond, which includes a premium for early redemption.
• C. The bondholder will receive shares of common stock instead of cash.
• D. The bondholder will receive only the face value of \$1,000 per bond.

Answer: (B)