meaning of call premium

call premium meaning in Law Dictionary

Premium in price above the par worth of a bond or share of favored stock that must definitely be paid to holders to get the bond or share of preferred stock before its scheduled readiness day.

call premium meaning in Business Dictionary

Amount over the par value of a bond that its issuer must pay towards the holders in the event that relationship is redeemed before its readiness day. Phone premium generally declines with the years of the bond's issue time; it's greater for bonds known as after 5 years compared to those known as after ten years. It compensates the bond holder for disruption in interest earnings, and for the energy to reinvest funds.