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 6.9% (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	6.68%	6.88%	6.98%	7.38%	7.88%

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

A.

$1,001

B.

$801

C.

$1,202

D.

$1,402

Click to select your answer.