BOND PREMIUM Definition

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BOND PREMIUM is the excess of the issue price over the face value of the bond.

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PRACTICAL CAPACITY is where the cost of production is based on the practical capacity of production facilities. Therefore, the proportion of overheads allocated to a unit of production is not to be increased as consequence of idle capacity of the plant.

OVERLEVERAGED is a balance sheet condition where the entity is incapable of servicing its debt load (interest payments) with available capital sources. Simply put, the entity is carrying too much debt.

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