Uliana co wants to issue a 20-year bond for some much-needed expansion projects. The company currently has 6% coupon bonds on the market with a par value of $1000 that sells for $967, make semiannual payments and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
Uliana co wants to issue a 20-year bond for some much-needed expansion projects. The company currently has 6% coupon bonds on the market with a par value of $1000 that sells for $967, make semiannual payments and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 17P
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Uliana co wants to issue a 20-year bond for some much-needed expansion projects. The company currently has 6% coupon bonds on the market with a par value of $1000 that sells for $967, make semiannual payments and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?
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