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Hello, I am trying to solve the following question using a BAII Plus calculator, and need help understanding how to derive the solution. CMS Corporation's

Hello, I am trying to solve the following question using a BAII Plus calculator, and need help understanding how to derive the solution.

CMS Corporation's balance sheet as of today is as follows:

Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have an 8.1% coupon rate, payable semiannually, and a par value of $1000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

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