Optum stock sells for $42 per share. The company wants to sell some semi-annual coupon payment bonds with a 10-year maturity at $1,000 today. Each bond would have 80 warrants attached to it, each exercisable into one share of stock at an exercise price of $45. The firms straight bonds yield to maturity is 12%. Each warrant is expected to have a market value of $4.00 given that the current stock sells for $42. What annual coupon rate must the company set on the bonds?