Use the Information for the Question(s)below

question 47

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 10-year bonds with a face value of $1 000 and a coupon rate of 7.0% (annual payments) . The following table summarises the YTM for similar 10-year corporate bonds of various credit ratings:

-Assuming that Luther's bonds receive a BBB rating, the price of the bonds will be closest to:

• A)$1 014
• B)$937
• C)$999
• D)$949