Cms corporations balance sheet as of today is as, Ask an Expert

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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 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 4.6% 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?

a. $5,756,129

b. $5,756,973

c. $5,755,285

d. $5,754,441

e. $5,753,597

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M93057803

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