Chamberlain Co. wants to issue new 16-year bonds for some much-needed expansion projects. The company currently has 11.2 percent coupon bonds on the market that sell for $1,203.97, make semiannual payments, and mature in 16 years. What coupon rate should the company set on its new bonds if it wants them to sell at par? Assume a par value of $1,000.

Multiple Choice

• 4.40%

• 8.80%

• 8.50%

• 9.10%

• 8.70%