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Lloyd Corporation’s 14% coupon rate, semiannual payment, $1,000 par value bonds, which mature in 30 years,...

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Finance

Lloyd Corporation’s 14% coupon rate, semiannual payment, $1,000par value bonds, which mature in 30 years, are callable 5 yearsfrom today at $1,050. They sell at a price of $1,353.54, and theyield curve is flat. Assume that interest rates are expected toremain at their current level. b. If Lloyd plan to raise additionalcapital and wants to use debt financing, what coupon rate would ithave to set in order to issue new bonds at par?

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Lloyd Corporation’s 14% coupon rate, semiannual payment, $1,000par value bonds, which mature in 30 years, are callable 5 yearsfrom today at $1,050. They sell at a price of $1,353.54, and theyield curve is flat. Assume that interest rates are expected toremain at their current level. b. If Lloyd plan to raise additionalcapital and wants to use debt financing, what coupon rate would ithave to set in order to issue new bonds at par?

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