14.

Luther Industries needs to raise $25 million to fund a new office complex. The company plans on issuing ten-year bonds with a face value of $1000 and a coupon rate of 7.0% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings: Rating AAA AA A BBB BB YTM 6.70% 6.80% 7.00% 7.40% 8.00% Assuming that Luther's bonds receive a AAA rating, the price of the bonds will be closest to: Select one: O A $1,021 OB. $1,014 OC. $1,000 OD. $937