A firm issues ten-year bonds with a coupon rate of 7%, paid semiannually. The credit spread for thisfirm's ten-year debt is0.8%. New ten-year Treasury notes are being issued at par with a coupon rate of 3.4%. What should the price of thefirm's outstanding ten-year bonds be per$100 of facevalue?

A.

$122.67

B.

$147.21

C.

$98.14

D.