A company has $1 million outstanding debentures with nine years to maturity. Debentures currently outstanding were sold at a face value of $100 and a coupon rate of 10% per annum. A merchant banker suggests that a new issue would required a coupon rate of 8% per annum to be fully subscribed on similar terms.

The current market value of the debentures is:

$10,237,846

$5,396,429

$2,364,827

$1,124,938