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

6.6% (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	6.77%	6.97%	7.07%	7.47%	7.97%

Assuming that Luther's bonds receive a AAA rating, the price of the bonds will be closest to:

A.

$1,186

B.

$988

C.

$790

D.

$1,383

Click to select your answer.