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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
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 5.9% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings: Rating YTM AAA 6.9% AA 7.1% A 7.2% BBB 7.6% BB 8.1% Assuming that Luther's bonds receive a AA rating, the price of the bonds will be closest to: O A. $733 O B. $916 O C. $1,099 OD. $1,283
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