Bird Corporation’s 12 percent coupon rate, semi-annual payment, $1,000 par value bonds that mature in 20 years are cal

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Bird Corporation’s 12 percent coupon rate,
semi-annual payment, $1,000 par value bonds that mature in 20
years are callable at a price of $1,100 five years from now, The
bonds sell at a price of $1,300 , and the yield curve is flat.
Assuming that interest rates in the economy are
expected to remain at their current level, what is the best
estimate of Bird’s nominal interest rate on the new
bonds?