$14$:$52$

all $5$G

$89$

Notes

Lourdes Corporation's $11\%$ coupon rate, semiannual payment, $$1000$ par value bonds, which mature in $10$ years, are callable $4$ years from today starting at $$1025.$ They sell at a price of $$1180\mathrm{.}06,$ and the yield curve is flat. Assume the interest rates are expected to remain at their current level.

A$.$ What is the best estimate of the bonds remaining life? Round to the nearest whole number.

B$.$ If Lourdes plans to raise additional capital and wants to use debt financing, what coupon rate would it have to set in order to issue new bonds at par?

:$-$