Doug Robinson is considering the possibility of opening his own manufacturing facility. He expects first$-$year sales to be $$800,000,$ and he feels that his variable costs will be approximately $40\%$ of sales. His fixed costs in the first year will be $$200,000.$

Doug is considering two ways of financing the firm: $($a$)40\%$ equity financing and $60\%$ debt at $10\%,$for $20$nyears or $($b$)100\%$ equity financing. He can sell common stock to his relatives for $$10$ per share. Either way, he will need to raise $$1,000,000.$ Other bonds simalar to these have a YTM of $12^$ What can he sell his bonds for

A$.$

$$767\mathrm{.}00$

B$.$

$$850\mathrm{.}61$

C$.$

$$679\mathrm{.}35$

D$.$

$$500\mathrm{.}95$