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Simple English definitions for legal terms
redemption price
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A quick definition of redemption price:
Redemption price: The amount of money that needs to be paid to redeem or buy back something. It is the price that must be paid to regain ownership or possession of something that was previously sold or given away.
A more thorough explanation:
Definition: The price at which a security or bond can be redeemed or bought back by the issuer.
Example: Company XYZ issued bonds with a face value of $1,000 each and a maturity date of 10 years. The redemption price of the bonds is set at $1,050, which means that after 10 years, the bondholders can redeem their bonds for $1,050 each.
Explanation: The redemption price is the amount that the issuer of a security or bond agrees to pay to the holder when the security or bond is redeemed or bought back. In the example, the redemption price of $1,050 is higher than the face value of $1,000, which means that the bondholders will receive a premium for holding the bonds until maturity.