Use the Information for the Question(s)below

question 5

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:
-What rating must Luther receive on these bonds if they want the bonds to be issued at par?

• A)A
• B)B
• C)BBB
• D)AA

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Definitions:

Quarterly Sales Forecast

An estimate of the amount of sales expected to be achieved in a specific quarter, aiding in business planning and resource allocation.

June Purchases

Refers to the acquisitions or buying activities carried out in the month of June, possibly for a business or personal needs.

Budgeted Profit and Loss Statement

A financial report that forecasts the revenue, expenses, and net income for a specific period, helping businesses in financial planning and control.

Uncollectible Accounts

Financial debts within accounts receivable that are considered unlikely to be recovered because customers are unable to fulfill payment obligations.