Your company currently has 6% coupon-rate bonds (coupons are paid semi-annually) with 10 years to maturity and

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Your company currently has 6% coupon-rate bonds (coupons are paid semi-annually) with 10 years to maturity and a price of $1000. If you want to issue new 10-year coupon bonds at par, what coupon rate do you need to set?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Related Book For  book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0133400694

1st canadian edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi

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