Use the Information for the Question(s)below

question 14

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 summarizes the YTM for similar ten-year corporate bonds of various credit ratings:
-Assuming that Luther's bonds receive a AAA rating,the number of bonds that Luther must issue to raise the needed $25 million is closest to:

• A)24,655.
• B)25,000.
• C)24,477.
• D)26,681.

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Definitions:

Import Substitution

A policy aimed at encouraging domestic production of goods that were previously imported.

Labor-intensive Production

A production process that relies more heavily on human labor than on technology or machinery, often characteristic of industries that require skilled workers.

Human Capital Shortages

A situation where there is a lack of adequately skilled or qualified individuals in the workforce to meet the demands of the job market.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured as a percentage increase in real gross domestic product (GDP).