What coupon rate would they need to place on the new bonds


Columbia Industries issued $10,000,000 of 30-year, $1,000 bonds 20 years ago. The bonds carry a 6% coupon rate and are currently selling for $670 per bond. Columbia is in a 30% tax bracket.

If Columbia issued new bonds today, what coupon rate would they need to place on the new bonds for them to sell at par value?

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Finance Basics: What coupon rate would they need to place on the new bonds
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