1. 22. Bond yields [LO 7.2] Woolgoolga Wool company wants to issue new 20-year bonds for some...

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1. 22.

Bond yields [LO 7.2] Woolgoolga Wool company wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6 per cent coupon bonds on the market that sell for $1 083, 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 face value?

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Rashul Chutani

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