McCurdy Co.'s Class Q bonds have a 12-year maturity, $1,000 par value, and a 9.5% coupon paid semiannually (4.75% each 6 months), and those bonds sell at their par value. McCurdy's Class P bonds have the same risk, maturity, and par value, but the p bonds pay a 9.5% annual coupon. Neither bond is callable. At what price should the annual payment bond sell?

Select the correct answer.

a. $1,003.77

b. $977.57

c. $984.12

d. $990.67

e. $997.22