Question $28$

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

Long$-$term debt $($bonds$,$ at par$),$$$10,000,000$

Preferred stock

$1,700,000$

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

$10,000,000$

Retained earnings

$4,600,000$

Total debt and equity

$$26,300,000$

The bonds have a $3\mathrm{.}8\%$ coupon rate, payable semiannually, and a par value of $$1,000.$ They mature exactly $10$ years from today. The yield to maturity is $11\mathrm{.}1\%,$ so the bonds now sell below par. What is the current market value of the firm's debt?

$$6,165,201$

$$5,429,902$

$$5,656,148$

$$5,938,955$

$$5,260,218$