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What is the current market value of the firm debt for cms

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CMS Corporation's balance sheet as of today is as follows:

Long-term debt (bonds, at par)$10,000,000

Preferred stock2,000,000

Common stock ($10 par)10,000,000

Retained earnings4,000,00

Total debt and equity$26,000,000

Problem 1: The bonds have a 8.9% 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?

Select the correct answer.

a. $8,221,698

b. $8,221,233

c. $8,223,091

d. $8,222,162

e. $8,222,627

Reference no: EM132998157

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