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 $1,000 and a coupon rate of 6.0% (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 AA rating, the price of the bonds will be closest to ________.

Question

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 $1,000 and a coupon rate of 6.0% (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 AA rating, the price of the bonds will be closest to ________.

Quizplus · Accepted Answer

B) FV = $1,000
PMT = $60.00
N = 10
I = 6.83
Compute PV = $941

Luther Industries Needs to Raise $25 Million to Fund a New