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Your company currently has $1,000 a par, 5% coupon bonds with 10 years to maturity and a price of$1,085. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set? Assume that for both bonds, the next coupon payment is due in exactly six months. You need to set a coupon rate of ______%. (Round to two decimal places.)

Your company currently has $1,000 a par, 5% coupon bonds with 10 years to maturity and a price of$1,085. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set? Assume that for both bonds, the next coupon payment is due in exactly six months. You need to set a coupon rate of ______%. (Round to two decimal places.)

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
Problem 10P
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Your company currently has $1,000 a par, 5% coupon bonds with 10 years to maturity and a price of$1,085. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set? Assume that for both bonds, the next coupon payment is due in exactly six months. You need to set a coupon rate of ______%. (Round to two decimal places.)
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