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

6.5%

(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	6.51%	6.71%	6.81%	7.21%	7.71%

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

A.

$788

B.

$985

C.

$1,379

D. $1,182