1vanilla ice co bonds pay an annual coupon rate of 10 and, Ask an Expert

Finance

1) Vanilla Ice Co. bonds pay an annual coupon rate of 10% and have 5 years to maturity. If investors' required rate of return is now 8% on these bonds.

a. Will the bonds be selling at a premium or a discount with respect to their $1000 face value? Why?

b. What is the price of the bonds?

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