1. Consider the case of Badger Corp.:

Badger Corp. has 9% annual coupon bonds that are callable and have 18 years left until maturity. The bonds have a par value of $1,000, and their current market price is $1,070.35. However, Badger Corp. may call the bonds in eight years at a call price of $1,060.

If Badger Corp. issued new bonds today, what coupon rate must the bonds have to be issued at par?