The bonds have an 74 coupon rate payable semiannually and a


Peoples Corporation's balance sheet as of today is as follows:
Long- term debt (bonds, at par $10,000,000
Preferred Stock 2,000,000
Common Stock ($10 par) 10,000,000
Retained Earnings 4,000,000
Total debt and Equity 26,000,000
The bonds have an 7.4% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt? Please do not round intermediatly.

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Finance Basics: The bonds have an 74 coupon rate payable semiannually and a
Reference No:- TGS0612663

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