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Pandora Media plans to issue original issue discount (OID ) bonds with a 20-year maturity, $1,000 par value, and initial yield to maturity of 8%Since
Pandora Media plans to issue original issue discount (OID ) bonds with a 20-year maturity, $1,000 par value, and initial yield to maturity of 8%Since these bonds are issued below par, the total yield will come from both annual coupon payments and appreciation. If the bonds are offered at a discounted price of $940, what is their nominal coupon rate ? That is, at this price, what coupon rate will result in a yield to maturity of 8%?
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