Coupon rate: The new bonds offer in order to sell at face value

  To determine the coupon rate for the new bonds that will enable them to sell at face value, we need to understand the relationship between coupon rates and bond prices. When a bond sells at face value, it means that the price of the bond is equal to its face value. In this case, General Matter's outstanding bond issue sells at a yield to maturity of 7.80%, which implies that its price is equal to its face value. The coupon rate of the existing bond issue is 9.4%. We can use this information to calculate the price of the bond using the yield to maturity formula: Bond Price = Coupon Payment / Yield to Maturity + Face Value / (1 + Yield to Maturity)^n Since the bond is selling at face value, we can substitute the price with the face value: Face Value = Coupon Payment / Yield to Maturity + Face Value / (1 + Yield to Maturity)^n To find the coupon rate for the new bonds that will also sell at face value, we need to solve for the coupon payment in this equation. Face Value - Face Value / (1 + Yield to Maturity)^n = Coupon Payment / Yield to Maturity Coupon Payment = (Face Value - Face Value / (1 + Yield to Maturity)^n) * Yield to Maturity Now we can substitute the values into the equation: Coupon Payment = (Face Value - Face Value / (1 + 7.80%)^n) * 7.80% To find the coupon rate, we need to divide the coupon payment by the face value and multiply by 100%: Coupon Rate = (Coupon Payment / Face Value) * 100% Let's calculate the coupon rate for the new bonds: Coupon Rate = ((Face Value - Face Value / (1 + 7.80%)^n) * 7.80% / Face Value) * 100% Please provide the value of 'n' (the number of periods until maturity) and I will calculate the coupon rate for the new bonds.  

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