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(Related to Checkpoint 9.3) (Bond valuation) Doisneau 20-year bonds have an annual coupon interest of 13 percent, make interest payments on a semiannual basis, and
(Related to Checkpoint 9.3) (Bond valuation) Doisneau 20-year bonds have an annual coupon interest of 13 percent, make interest payments on a semiannual basis, and have a $1,000 par value. If the bonds are trading with a market's required yield to maturity of 18 percent, are these premium or discount bonds? Explain your answer. What is the price of the bonds? a. If the bonds are trading with a yield to maturity of 18%, then (Select the best choice below.) O A. the bonds should be selling at par because the bond's coupon rate is equal to the yield to maturity of similar bonds. O B. the bonds should be selling at a premium because the bond's coupon rate is greater than the yield to maturity of similar bonds. O C. the bonds should be selling at a discount because the bond's coupon rate is less than the yield to maturity of similar bonds. O D. there is not enough information to judge the value of the bonds
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