A call premium is best described as the amount the:

A call premium refers specifically to the amount that an issuer pays above the face value of a bond when they choose to retire that bond before its maturity date. This action is often taken when interest rates decrease, allowing the issuer to refinance the debt at a lower cost. In such cases, the issuer compensates the bondholders with the call premium as an incentive for them to surrender their bonds early. The premium may reflect the bond’s perceived value and the interest that would be lost by investors who hold the bond until maturity.

Recognizing this, it’s clear that this option accurately captures the essence of what a call premium represents in the context of bond issuance and repayment.