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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 6.2% (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 6.76% 6.96% 7.06% 7.46% 7.96% Assuming that Luther's bonds receive a AAA rating, the price of the bonds will be closest to: O A. $1,344 B. $768 O C. $960 OD. $1,152
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