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( Bond valuation ) Doisneau 1 5 - year bonds have an annual coupon interest of 1 2 percent , make interest payments on a
Bond valuation Doisneau year bonds have an annual coupon interest of percent make interest payments on a semiannual basis, and have a $ comma par value. If the bonds are trading with a market's required yield to maturity of percent are these premium or discount bonds? Explain your answer. What is the price of the bonds?
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Part
a If the bonds are trading with a yield to maturity of then Select the best choice below.
A
there is not enough information to judge the value of the bonds.
B
the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds.
C
the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds.
D
the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds.
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