Miller Motorworks has a $1,000 face value,8% annual coupon bond with interest payable semiannually with a remaining term of 15 years.The annual market yield on similar bonds is 6%.This bond will at a discount from par.

Question

Quizplus · Accepted Answer

Since the annual market yield (also known as the yield to maturity) is less than the coupon rate of the bond (6%<8%), the bond will be sold at a premium rather than a discount from par.

Miller Motorworks Has a $1,000 Face Value,8% Annual Coupon Bond