Sinbad Co. Ltd. is a company specializing in the production of high-end yachts for the billionaires. In order to expand

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Sinbad Co. Ltd. is a company specializing in the production of
high-end yachts for the billionaires. In order to expand its
business, Sinbad wants to raise further debt capital and is about
to issue 300,000 20-year bonds with 5% annual coupons and a face
value of $1,000 each. A similar issue already outstanding is a
par-value bond that offers a 6% annual coupon with the same face
value. One year later, the market yield for this new bond has
dropped by 1 percentage point.
At what price should Sinbad sell its new bonds (at time
0)?
Compute the realized yield over this one year holding
period.