Bandon Manufacturing intends to issue callable, perpetual bonds with annual coupon

payments and a par value of $$1,000.$ The bonds are callable at $$1,205.$ One$-$year interest

rates are $11$ percent. There is a $60$ percent probability that long$-$term interest rates one

year from today will be $10$ percent, and a $40$ percent probability that they will be $8$

percent. Assume that if interest rates fall the bonds will be called. What coupon rate

should the bonds have in order to sell at par value? $($Do not round intermediate

calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,$

$32\mathrm{.}16.)$

Coupon rate