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.
Coupon bonds on the market
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