What is the yield to maturity of the bozo company

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The Bozo Company has an 8% coupon bond outstanding. The bond makes semiannual coupon payments and has 12 years remaining to maturity. Its market price is $846.64. It is issuing a new 20-year bond to finance a factory to make new Bozos. The new bond will make annual coupon payments.

Question 1: What is the yield to maturity of the Bozo Company's existing bonds?

Question 2: What coupon rate should be set for the new bonds of the Bozo Company for these bonds to sell at par?

Reference no: EM132592663

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