A company issues bonds with a 6% coupon rate and a 20 year maturity.
(1) What is the coupon amount for each $1,000 bond, assuming the bond pays interest annually?
(2) If bond prices are 7% at time of issue, what price will it issue each $1,000 bond at in order to have the proper return?
(3) Will this issue be considered at a discount or at a premium or at par?
Note: This question will require you to calculate the NPV of the bond.