Answer: 2.)Since the bonds are selling at a premium, the coupon rate should be set at the going rate, which is the YTC.
Explanation:
The bond is a callable bond and the callable price is below the market price so the bond is likely to be called. In which case the relevant going rate would be the Yield to Call and so this the rate Lourdes should issue the bonds at in order for it to be at par.
