Lackner Bros. Has 12 percent semiannual bonds outstanding which mature in 10 years. Each bond is now eligible to be called at a call price of $1,060....

Lackner Bros. Has 12 percent semiannual bonds outstanding which mature in 10 years. Each bond is now eligible to be called at a call price of $1,060. If the bonds are called, the company must replace the bonds with new 10-year bonds. The flotation cost of issuing new bonds is estimated to be $45 per bond. How long would the yield to maturity on the new bonds have to be in order for it to be profitable to call the bonds today? (That is, what is the “breakeven rate”?)