In order to accurately assess the capital structure of a firm,it is necessary to convert its balance sheet figures from historical book values to market values.KJM Corporation's balance sheet (book values) as of today is as follows:
The bonds have a 8.4% coupon rate,payable semiannually,and a par value of $1,000.They mature exactly 10 years from today.The yield to maturity is 11%,so the bonds now sell below par.What is the current market value of the firm's debt?
A) $19,849,158
B) $21,238,599
C) $15,085,360
D) $18,459,717
E) $22,231,057
Correct Answer:
Verified
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