1. Describe under what conditions bonds are issued at par, premium or discount? (a) For...

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1. Describe under what conditions bonds are issued at par, premium or discount? (a) For each of the following issues, indicate whether the price of the issue should be par value, above par value, or below par value: Issue Coupon Rate Yield Required by Market a. A 5 1/4% 7.25%

b. B 6 5/8% 7.15%

c. C 0% 6.20%

d. D 5 7/8% 5.00% e. E 4 1/2 % 4.50%

(b) What are the advantages and disadvantages of being a holder of the common stock of IBM as opposed to being a bondholder?

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