Bavarian sausage wants to issue a 10-year coupon bond the


Question: 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?

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