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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 6.7% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings: Rating YTM AAA AA BBB BB 6.88% 7.08% 7.18% 7.58% 8.08% Assuming that Luther's bonds receive a AA rating, the number of bonds that Luther must issue to raise the needed $25 million is closest to: O A. 30,820 OB. 20,546 O C. 35,956 OD. 25,683
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