Question
Bond Valuation: COUPON RATE A company wants to issue new 30-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds
Bond Valuation: COUPON RATE
A company wants to issue new 30-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1,065, make annual payments, and mature in 20 years. What coupon rate should the company set on its new bonds if it wants them to sell at par?ABC Company wants to issue new 30-year bonds for some much-needed expansion projects. The company currently has 8 percent coupon bonds on the market that sell for $1,065, make annual payments, and mature in 20 years.
What coupon rate should the company set on its new bonds if it wants them to sell at par?
--Please do not use excel sheet or financial apps/tools to solve the question as I am not learning through those methods (Please use manual formula)--
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Personal Finance Turning Money Into Wealth
Authors: Arthur J. Keown
6th Edition
0132719169, 978-0132719162
