You purchased a bond with par value of $ 1,000, a maturity of 14 years and an annual interest rate of 9%. The required return in the market for a comparable bond at risk is 10%.

Answer or calculate the following:

1. Determine the value of the bond or the price paid, given the required rate of return. Show procedure

2. Is the bond selling at par, at a premium, or at a discount? explain

3. Is the bond being sold on the primary or secondary market? explain

4. List two reasons why a company or government issues or sells bonds.

5. Would you buy the bond? explain