The correct answer is: C. Less than face value.
Commercial paper is a short-term unsecured promissory note issued by a company. It is a type of debt instrument that is typically issued at a discount to its face value. This means that the investor pays less than the face value of the note when it is issued, and then receives the full face value of the note when it matures.
The discount rate is determined by a number of factors, including the creditworthiness of the issuer, the maturity of the note, and current interest rates. Commercial paper is a popular form of financing for companies because it is a relatively inexpensive way to raise short-term cash.
Here is a brief explanation of each option:
- Option A: Commercial paper are generally issued at a price equal to face value. This is not correct because commercial paper are typically issued at a discount to face value.
- Option B: Commercial paper are generally issued at a price more than face value. This is not correct because commercial paper are typically issued at a discount to face value.
- Option C: Commercial paper are generally issued at a price less than face value. This is correct because commercial paper are typically issued at a discount to face value.
- Option D: Commercial paper are generally issued at a price equal to redemption value. This is not correct because commercial paper are typically issued at a discount to face value, and the redemption value is the full face value of the note.