A firm issues a $10 million bond with a 6% coupon rate, 4-year maturity, and annual interest payments when market interest rates are 7%.

The initial book value of the bonds is:

A. $9,400,000.

B. $9,661,279.

C. $10,000,000.

The present value of a 4-year annuity of $600,000 plus a 4-year lump sum of $10 million, all valued at a discount rate of 7%, equals $9,661,279.

Show me the detailed process and formula to get $9,661,279.