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Suppose XG is considering an expansion which it will finance through additional bond sales. Current outstanding XG bonds are selling for $1,148.77. These have a face value of $1,000, and a coupon of 8% and 10 years to maturity. If interest is paid semiannually, what must the coupon rate of the new bonds be in order for the issue to sell at par? The issue will also mature in 10 years and pay semiannual coupons. Please show all work, including formula used.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91781212

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