Hi can I please have some help with the following question? Thanks.
BDJ Ltd wants to
issue new 25-year bonds for some much-needed expansion projects. The
company currently has 7.8% coupon bonds on the market that sell for $1125, make semi-annual
payments and matures in 20 years. What coupon rate should the company set on its new bonds if
it wants them to sell at par? The current bonds have a face value of $1000.