On January 1, 1997, HomeSafe Cab Co. will issue new bonds to finance its expansion plans. Currently outstanding 9%, January 1, 2010 HomeSafe bonds are selling for $1,067.91. If interest is paid semi-annually for both bonds, what must the coupon rate of the new bonds be in order for the issue to sell at par?
A) 4.00%
B) 4.21%
C) 7.72%
D) 7.99%
E) 8.13%
Correct Answer:
Verified
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