Chamberlain Co. wants to issue new 16-year bonds for some
much-needed expansion projects. The company currently has 12.0
percent coupon bonds on the market that sell for $1,403.43, make
semiannual payments, and mature in 16 years. What coupon rate
should the company set on its new bonds if it wants them to sell at
par? Assume a par value of $1,000.
A. 3.80%
B. 7.60%
C. 7.50%
D. 7.30%
E. 7.90%