Round Dot Inns Is preparing a bond offering with a coupon rate of 6 percent, pai

Question

Round Dot Inns Is preparing a bond offering with a coupon rate of 6 percent, paid semiannually, and a face value of $1,000. The bonds will mature In 10 years and will be sold at par. Given this, which one of the following statements Is correct? The bonds will sell at a premium if the market rate is 5.5 percent. The bonds will become discount bonds if the market rate of interest declines. The bonds will pay 10 interest payments of $60 each. The bonds will initially sell for $1,030 each. The final payment will be in the amount of $1,060.

Explanation / Answer

yes, the bond will sell at premium if market rate is 5.5% since coupon rate is greater than interest payment

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.