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+ CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock $10,000,000 Common stock ($10 par) Retained earnings Total debt and equity 2,000,000 10,000,000 4,000,000 $26,000,000 ப The bonds have a 8.3% 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. $7,877,532 b. $7,879,129 c. $7,878,597 d. $7,879,661 e. $7,878,065

+ CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock $10,000,000 Common stock ($10 par) Retained earnings Total debt and equity 2,000,000 10,000,000 4,000,000 $26,000,000 ப The bonds have a 8.3% 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. $7,877,532 b. $7,879,129 c. $7,878,597 d. $7,879,661 e. $7,878,065

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 3EB: Smashing Cantaloupes Inc. issued 5-year bonds with a par value of $35,000 and an 8% semiannual...
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+ CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock $10,000,000 Common stock ($10 par) Retained earnings Total debt and equity 2,000,000 10,000,000 4,000,000 $26,000,000 ப The bonds have a 8.3% 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. $7,877,532 b. $7,879,129 c. $7,878,597 d. $7,879,661 e. $7,878,065
Transcribed Image Text:+ CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) Preferred stock $10,000,000 Common stock ($10 par) Retained earnings Total debt and equity 2,000,000 10,000,000 4,000,000 $26,000,000 ப The bonds have a 8.3% 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. $7,877,532 b. $7,879,129 c. $7,878,597 d. $7,879,661 e. $7,878,065
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