In order to accurately assess the capital structure of a firm, it is necessary to convert its balance

sheet figures from historical book values to market values. KJM Corporation's balance sheet $($book

values$)$ as of today is as follows:

Long$-$term debt $($bonds$,$ at par$)$ $$23,500,000$

Preferred stock

$2,000,000$

Common stock $($$$10$ par$)$

$10,000,000$

Retained earnings

$4,000,000$

Total debt and equity

$$39,500,000$

The bonds have a $9\mathrm{.}0\%$ coupon rate, payable semiannually, and a par value of $$1,000.$ They mature

exactly $10$ years from today. The yield to maturity is $11\%,$ so the bonds now sell below par. What is

the current market value of the firm's debt?

$$20,277,827$

$$23,174,659$

$$25,243,825$

$$22,346,993$

$$20,691,660$