A 12 year bond has 6 years left to maturity and its coupon rate is 8%, paid semi-annually. Consider each of the following situations separately. Please show work.
A. If the required return on this bond (the current market rate for similar bonds) is 6%, will this bond sell for a premium or a discount (no calculations are needed)?
B. What is the bond’s current price if the market rate is 4.5%?
C. Using the answer in part b, determine the Current Yield.
D. If the bond is currently quoted at 92.95 in the market, what is the Yield to Maturity?