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A new computationally efficient peak-to-average power ratio (PAPR) reduction scheme for orthogonal frequency division multiplexing (OFDM) signals is proposed, which utilizes the parabolic peak cancellation (PPC) using the truncated kernel signal generated from the inverse fast Fourier transform (IFFT) of the shaped peak reduction tones (PRTs). The proposed scheme only repeats peak canceling in the time domain without iteratively performing IFFT and FFT. Also, the application of the proposed PPC scheme to active constellation extension (ACE) can reduce the number of iterations of IFFT and FFT. Moreover, a transmit power allocation scheme is also suggested to relieve the degradation of bit error rate (BER) of the proposed PAPR reduction scheme. Numerical analysis shows that if the shaping parameters of PRTs are chosen properly, out-of-band (OOB) radiation and BER can be improved while the PAPR reduction performance is maintained.