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
Brand: Quizplus
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Question

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Since the required rate of return is less than the coupon rate, the bond will be priced at a premium to face value in order to bring the yield down to the required rate of return.