Question 3

LKM, Inc. wants to issue new 20-year bonds for some much-needed expansion projects. The company currently has 6.5 percent coupon bonds on the market that sell for $972.78, make semiannual 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?

Group of answer choices

The same rates as the yield to maturity on the old bonds

The same rate as the current yield on the new bonds

The same rate as the yield to maturity on the new bonds

The same rate as current market interest rates

All of the above