Aj pharmaceuticals would like to issue 20-year bonds to

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AJ Pharmaceuticals would like to issue 20-year bonds to obtain the remaining funds for the new, Mexico plant. The company currently has 6.5% semiannual coupon bonds in the market that sell for $1,040 and mature in 20 years.

1. What coupon rate should AJ Pharmaceuticals set on its new bonds to sell them at par value?

Reference no: EM13617056

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