What coupon rate will the new bonds have

Reference no: EM132042586

Question: Dalton Inc. originally issued 15-year bonds at par.The bonds currently have 10 years remaining until they mature. The bonds have a coupon rate of 7.6% with coupons paid semiannually. They currently trade at 1151.50 per bond.

Dalton Inc. wants to issue more debt.They are considering 10-year bonds. What coupon rate will the new bonds have if the added debt does not change the chance that Acme will default? Explain.

Reference no: EM132042586

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