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Bond coupon rate and yield to maturity

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A company currently has 10 percent coupon bonds on the market that sell for 1,063, 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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Solution Summary

The solution determines what coupon rate the company should set on its new bonds if it wants to sell at par (see attachment).

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