Which it will finance through additional bond sales

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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 semi-annually, 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 semi-annual coupons.

Reference no: EM131056908

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