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 7.3% (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 6.55% 6.75% 6.85% 7.25% 7.75%
Assuming that Luther's bonds receive a AAA rating, what is the number of bonds that Luther must issue
to raise the needed $25 million? Show calculations.