B&B Railroad has an outstanding bond issue that will mature to its $1,000 par value in 10 years. The bond has a coupon rate of 6% and pays interest semiannually.

If the required market return on the bond is 8%, will the bond sell at a discount, a premium or at its par value?

Select one:

a. It will sell at a discount.

b. It will sell at a premium.

c. It will sell at its par value.