Evans \& Sons, Inc., decides to sell \(\$ 1,000,000\) in bonds to finance the construction of a new warehouse. The bonds will carry an annual coupon rate of interest of three percent, to be paid semiannually, and will mature in five years.

(a) If the market rate of interest at the time of issuance is five percent, will the bonds sell at their face value, a discount, or a premium?

(b) If the market rate of interest at the time of issuance is three percent, will the bonds sell at their face value, a discount, or a premium?

(c) If the market rate of interest at the time of issuance is two percent, will the bonds sell at their face value, a discount, or a premium?