call premium

call premium definition - business

call premium

The difference between the principal amount of a security and the price at which the security can be called by the issuer. Call premiums often gradually decline over the life of the security until they reach zero at maturity. Calls for sinking fund requirements are usually made at par rather than at a premium. Also called redemption premium.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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