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Question 1 (11 Marks) Brownie Coffee Group has just issued a 8-years, with a face value of $1,000,14% semi-annual coupon bond. The yield-to-maturity (YTM) on

Question 1 (11 Marks) Brownie Coffee Group has just issued a 8-years, with a face value of $1,000,14% semi-annual coupon bond. The yield-to-maturity (YTM) on this bond is 16% compounded semi-annually. a. Based on bond properties, determine if this bond is selling at a discount, at par or at a premium. b. What is the current price of this bond? Show all your calculations. 2 marks c. Suppose the yield-to-maturity (YTM) on this bond remains unchanged, what will be the bond price in five years? Show all your calculations. 5 marks

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