The bonds have an 93 coupon rate payable semi annually and


Super Fun 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 9.3% coupon rate, payable semi annually, 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?

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Financial Management: The bonds have an 93 coupon rate payable semi annually and
Reference No:- TGS01109268

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