1. Blue Co. wants to issue new 10-year bonds for an expansion project. The company currently has 5% (annual coupon rate) coupon bonds on the market. This existing bond was issued 5 years ago and the original term to maturity was 15 years. Currently, this bond is selling at 95% of the par value and makes semiannual coupon payments. The par value of bonds is $1,000. If the company wants to sell its new bonds at par, what should the coupon rate be for new bonds? Suppose that the par value of new bonds is also $1,000 and the new bond pays coupon semiannually.