Assuming that Luther's bonds receive a AA rating, the number of bonds that Luther must issue to raise the needed $25 million is closest to ________
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 5.6% (annual payments). The following table summarizes the YTM for similar ten-year corporate bonds of various credit ratings:
Rating AAA AA A BBB BB
YTM 6.86% 7.06% 7.16% 7.56% 8.06%
A) 27,848
B) 33,417
C) 38,987
D) 22,278
Answer: A
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What will be an ideal response?
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Stocks that are highly sensitive to changing economic conditions are known as
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