Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Tutoring
  • Home
  • Economics, Finance, & Analytics
  • Business Finance, Personal Finance, and Valuation Principles

At a Premium - Explained

What is At a Premium?

Written by Jason Gordon

Updated at April 16th, 2022

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Professionalism & Career Development
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Courses
+ More

Table of Contents

What is At A Premium?How Does at a Premium Work?

What is At A Premium?

At a premium is a term that describes a condition in which an item has a higher price because it is valuable, many people want it, but it is scarce. In asset valuation at a premium describes a situation where the current value of an asset is more than its intrinsic or fundamental value. An item or asset that is at a premium is its value is in excess, therefore, it is held in high esteem by individuals.

Back to:BUSINESS & PERSONAL FINANCE

How Does at a Premium Work?

Here are situations that clearly depicts the phrase at a premium;

  • A callable bond that is trading at a premium to its par value means it has additional value which is above its face value.
  • If share of Company XYZ are trading at a premium to the shares of Company ABC, it means the shares of the former company have excess value when compared to the shares of the other company.
  • A closed-end fund trading at a premium is trading at a price higher than its NAV )net asset value).
  • If the product of a company is priced at a premium, it is priced at a higher value than other products from other companies.
at a premium

Was this article helpful?

Yes
No

Related Articles

  • Capital Dividend - Explained
  • Market Based Business Valuation - Explained
  • Cost of Equity - Explained
  • Appropriation - Explained



©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand