Question 1 (6 marks) 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 7.0% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings: Rating AAA AA A BBB BB Yield to Maturity (YTM) 6.70% 6.80% 7.00% 7.40% 8.00% Use the above information to answer the question(s) below. a) If Luther's bonds receive a AAA rating, what will the price of the bonds be? And, what is the number of bonds that Luther must issue to raise the needed $25 million? (2 marks) b) What rating must Luther receive on these bonds if they want the bonds to be issued at par value? (1 mark) c) Suppose that when these bonds were issued, Luther received a price of $972.42 for each bond. What is the likely rating that Luther's bonds received? (1 mark) d) Explain why the expected return of a corporate bond does not equal its yield to maturity (YTM)? (2 marks) Round your answers to 2 decimal places