Bond

PT STAR, Tbk has issued bonds at the beginning of 2010 with a nominal value of IDR 10,000,000 per share, a coupon of 12% per year which is paid every semester. The bonds have a maturity of 5 years. If now (early 2012) you want to buy these bonds and the market price per bond is IDR 9,500,000. Question: a) Calculate the fair value of the bond if the prevailing market interest rate is 10% per year. b) Are you willing to buy the bonds? c) Are the bonds sold at a premium or discount? Explain