(Answered) The bonds of xyz inc pay an annual coupon rate of 10 and

Economics

The bonds of XYZ, Inc. pay an annual coupon rate of 10% and have 12 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 $1,000 face value? Why?

b) What is the fair price of the bonds?

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Business Economics, Economics

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