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:

Reciprocal Nature

The mutual or two-way characteristic of certain interactions or relationships, where actions or behaviors are mirrored or returned in kind.

Contingency Contracting

A behavioral strategy involving a formal agreement between parties outlining specific behaviors and consequences or rewards.

Reciprocal Behavioral Agreement

An agreement between parties to engage in specific behaviors that are beneficial to each other, establishing a mutual exchange of positive actions.

Potential Barriers

are obstacles or challenges that might impede progress or the achievement of an objective.