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Your company currently has $1,000 par, 6% coupon bonds with 10 years to maturity and a...

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Finance

Your company currently has $1,000 par, 6% coupon bonds with 10years to maturity and a price of $1,082. If you want to issue new10-year coupon bonds at par, what

coupon rate do you need to​ set? Assume that for both​ bonds,the next coupon payment is due in exactly six months.

Answer & Explanation Solved by verified expert
3.6 Ratings (293 Votes)
First we will calculate the Yield to maturity of currentbondFace value 1000 Coupon rate 6 Years to maturity 10years Current price 1082As the bond pays coupon semi annually thereforeSemi annual coupon payment Coupon rate x face value    See Answer
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