Bavarian Sausage wants to issue a 10-year coupon bond.The face value of the bond is $1,000 and the bond makes SEMIANNUAL coupon payments.Outstanding Bavarian Sausage 8% bonds with a remaining maturity of 10 years are currently trading at $1,145.These bonds also have a face value of $1,000 and make SEMIANNUAL payments.If Bavarian Sausage wants the new bonds to sell at par,what should be the coupon rate on these bonds?
A) 8.00%
B) 6.05%
C) 7.25%
D) 9.35%
Correct Answer:
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