In financing its $180M project, Lee Corp. (i) issues $20M par value of preferred stocks,

(ii) $70M par value of long-term debt, and (iii) finances the remaining portion of the project with common stocks that have a discount rate of 15%.

Its 18-year 8% coupon bonds, which pay coupons twice annually, are priced at 96% of the par value. Its preferred stocks have a 7.2% annual dividend rate on a par value of $100 and are priced at $104 per share.

Compute the current yield and the capital gain yield of the discount/par/premium (circle correct choice) bond issued by Lee Corp. Based on the information about the bond, state TWO different properties that support your choice of the bond type.