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Assets, Incorporated, plans to issue $ 5 million of bonds with a coupon rate of 7 . 9 percent, a par value of $ 1

Assets, Incorporated, plans to issue $5 million of bonds with a coupon rate of 7.9 percent, a par value of $1,000, semiannual coupons, and 20 years to maturity. The current market interest rate on these bonds is 7.3 percent. In one year, the interest rate on the bonds will be either 9 percent or 6 percent with equal probability. Assume investors are risk-neutral.
a.
If the bonds are noncallable, what is the price of the bonds today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.)

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