HomeSafe Cab Co. wants to issue new 10-year bonds to finance its expansion plans. Currently...
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Finance
HomeSafe Cab Co. wants to issue new 10-year bonds to finance its expansion plans. Currently the company has 9 percent semiannual bonds selling for $1,067.95 that mature 10 years from now. What must the coupon rate of the new bonds be in order for the issue to sell at par if interest is paid semiannually?
A. 4.00 percent
B. 4.21 percent
C. 7.72 percent
D. 7.99 percent
E. 8.00 percent
The correct answer should be E. 8.00 percent. But I am not sure how to calculate the result. Thank you.
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