Cassel Corp. bonds pay an annual coupon rate of 10%. If investors' required rate of return is now 8% on these bonds, they will be priced at

Name: Cassel Corp. bonds pay an annual coupon rate of 10%. If investors' required rate of return is now 8% on these bonds, they will be priced at
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Question

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Because the investors' required rate of return is lower than the bond's coupon rate, there is a high demand for the bond. As a result, the bond price will be bid up and sold at a premium to par value.