Recently, Ohio Hospitals Inc.filed for bankruptcy.The firm was reorganized as American Hospitals Inc., and the court permitted a new indenture on an outstanding bond issue to be put into effect.The issue has 10 years to maturit and a coupon rate of 10 percent, paid annually.The new agreement allows the firm to pay no interest for 5 years.Then, interest payments will be resumed for the next 5 years.Finally, at maturity (Year 10), the principal plus the interest that was not paid during the first 5 years will be paid.However, no interest will be paid on the deferred interest.If the required return is 20 percent, what should the bonds sell for in the market today?

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The Answer of Recently, Ohio Hospitals Inc.filed for bankruptcy.The firm was reorganized as American Hospitals Inc., and the court permitted a new indenture on an outstanding bond issue to be put into effect.The issue has 10 years to maturit and a coupon rate of 10 percent, paid annually.The new agreement allows the firm to pay no interest for 5 years.Then, interest payments will be resumed for the next 5 years.Finally, at maturity (Year 10), the principal plus the interest that was not paid during the first 5 years will be paid.However, no interest will be paid on the deferred interest.If the required return is 20 percent, what should the bonds sell for in the market today?