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

5.6%

(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	6.75%	6.95%	7.05%	7.45%	7.95%

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

A.

$1,286

B.

$1,102

C.

$918

D. $735