A city waterworks publishes a tombstone offering a $20 million new issue of bonds priced at 100.65%. The bonds are priced above par because the:
A) amount exceeding par represents the underwriter's spread.
B) municipality has applied the standard municipal bond servicing charge to the issue price.
C) price reflects the fact that the coupon rate for the bonds at issuance is more than the rates of similar newly issued bonds available in the market.
D) amount exceeding par includes accrued interest.
Answer: C) price reflects the fact that the coupon rate for the bonds at issuance is more than the rates of similar newly issued bonds available in the market.