COOP PRODUCTS, INC. JUST ISSUED 10-YEAR, 8% COUPON BONDS AT PAR. O...

26. Coop Products, Inc. just issued 10-year, 8% coupon bonds at par. Outstanding Elkana Corp. bonds, which have a maturity of 10 years, sell at a premium and are viewed by investors as having the same risk as the Coop bonds. Therefore, it must be true that the: A) Coupon rate on the Elkana bonds is equal to that on the Coop bonds. B) Coupon rate on the Elkana bonds is higher than that on the Coop bonds. C) Coupon payment on the Elkana bonds is lower than that on the Coop bonds. D) Yield to maturity on the Elkana bonds is higher than the YTM on Coop bonds. E) Elkana bonds pay coupons more often than twice a year. Solution: B