MLK,IncWants to Issue New 15-Year Bonds for Some Much-Needed Expansion

question 58

Multiple Choice

MLK,Inc.wants to issue new 15-year bonds for some much-needed expansion projects.The company currently has 6.5 percent coupon bonds on the market that sell for $975.00,make semiannual payments,and mature in 15 years.What coupon rate should the company set on its new bonds if it wants them to sell at par?

• A)3.38 percent
• B)6.37 percent
• C)6.50 percent
• D)6.67 percent
• E)6.77 percent

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