Problem:
Seether Co. wants to issue new 11-year bonds for some much-needed expansion projects. The company currently has 8.7 percent coupon bonds on the market that sell for $959.22, make semiannual payments, and mature in 11 years. The company should set a coupon rate of _______ percent on its new bonds if it wants them to sell at par. Explain all workings out and describe comprehensively.