Bonds: The company issued 80,000 bonds. The bonds have a $1,000 face value with 7.5% coupons with annual payments, 7 years to maturity, and currently sell for $925. The marginal tax rate is 12%. Common Stock: The company has 500,000 shares of common stock outstanding, selling for $41 per share. The companys beta is 1.25, the risk free rate is 2%, and the market risk premium is 9%. Preferred Stock: The company issued 100,000 shares of preferred stock. Preferred stock pays a dividend of $1 per share, and preferred stock sells for $20 per share.

1. What is the market value of the firms debt?