Problemseether co wants to issue new 13-year bonds for some, Ask an Expert

Accounting

Problem:

Seether Co. wants to issue new 13-year bonds for some much-needed expansion projects. The company currently has 9.8 percent coupon bonds on the market that sell for $868.69, make semiannual payments, and mature in 13 years.

Required:

Question: What coupon rate should the company set on its new bonds if it wants them to sell at par

5.90%
11.50%
12.10%
11.80%
11.70%

Note: Be sure to show how you arrived at your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166131

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