Walker Industries is planning to issue new 15-year bonds (with semi-annual coupons). The company already has bonds outstanding- specifically, 7.5% semi-annual coupon bonds maturing in 16 years which currently sell for $1,046.25. Generally, when new bonds are issued, they are set to sell at par. What coupon rate would the new bonds have to have in order for them to be sold at par?

Answer rating: 100% (QA)

To sell the coupon at par value the coupon rate on the bond must be equal to prevailing ... View the full answer