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BHP Billiton issued a coupon bond with a par value of R2 750 000. The coupon bond pays an annual interest rate of 6% and

BHP Billiton issued a coupon bond with a par value of R2 750 000. The coupon bond pays an annual interest rate of 6% and matures in ten years. The bond is currently trading at R2 875 000. Assume that an investor's required rate of return is 4.55%.

Without doing any calculations you will be able to do a observation from the information given. What would this observation be?

A.The coupon bond will be sold at a premium.

B.The coupon bond will be sold at a discount.

C. Too little information is given.

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