A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield
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Question:
A bond with an annual coupon of $100 originally sold at par for $1,000. The current yield to maturity on this bond is 9%. Assuming no change in risk, this bond would sell at a_____________ in order to compensate____________________________.
A. discount; the seller for the above-market coupon rate
B. premium; the purchaser for the above-market coupon rate
C. premium; the seller for the above-market coupon rate
D. discount; the purchaser for the above-market coupon rate
E. discount; the issuer for the higher cost of borrowing
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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