1. Allred, Inc., is in financial distress. Its bonds have a 12% coupon rate and they pay the interest semiannually. There is a 70% chance that it will go bankrupt after 1 year, and it faces certain bankruptcy after 2 years. In case of bankruptcy, the company will pay interest due on the bonds, but will pay only 30% of the principal, at the end of that year. If your required rate of return is 12%, how much should you pay for a $1,000 Allred, Inc., bond?