Use the information for the question(s) below.
The Sisyphean Company has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond
certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made
semiannually.
-Assuming the appropriate YTM on the Sisyphean bond is 7.5%, then this bond will trade a?

Question

Quizplus · Accepted Answer

Since the YTM (7.5%) is lower than the coupon rate (8%), investors will be willing to pay more than the face value of the bond to receive the higher coupon payments. Therefore, the bond will trade at a premium.

Use the Information for the Question(s) Below