Use the Information for the Question(s) Below -Suppose That When These Bonds Were Issued, Luther Received a to Raise

question 66

Multiple Choice

Use the information for the question(s) below.
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 summarises the YTM for similar
ten-year corporate bonds of various credit ratings:
$\begin{array} { l c c c c c } \hline \text { Rating } & \text { AAA } & \text { AA } & \text { A } & \text { BBB } & \text { BB } \\\hline \text { YTM } & 6.70 \% & 6.80 \% & 7.00 \% & 7.40 \% & 8.00 \% \\\hline\end{array}$
-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?

• A) A
• B) B
• C) BBB
• D) AA

---

Definitions:

Activity Theory

A psychological and sociological theory that suggests older adults are happier and more satisfied if they remain engaged in activities and maintain social interactions.

Gender Stratification

Is the unequal distribution of wealth, power, and privilege across genders within a society.

Biological Perspective

A way of looking at psychological issues by studying the physical basis for animal and human behavior.

Genetic Factors

Influences on an individual's traits and behaviors that originate from their genetic makeup.