Illinois industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 7%, payable annually. The one-year interest rate is 7 percent. Next year, there is a 35 percent probability that interest rates will increase to 9 percent, and there is a 65 percent probability that they will fall to 6 percent.

a.	What will the market value of these bonds be if they are noncallable? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Market value

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