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    BDJ Co. - Coupon Rate Bonds

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    BDJ Co. wants to issue new 10-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1,095, make semiannual payments, and mature in 10 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

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    BDJ Co. wants to issue new 10-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1,095, make semiannual payments, and mature in 10 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?

    First, we need to calculate how much the bonds have been issued by using the formula as follows: ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what coupon rate should the company set on its new bonds if it wants them to sell at par.

    $2.19

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