1. Sam and Fred would like me to accurately assess the capital structure of their firm because they want to convert their balance sheet figures from historical book values to market values. Their balance sheet (book values) as of today is as follows:

Long-term debt (bonds, at par)	$30,000,000
Preferred stock	3,000,000
Common stock ($10 par)	15,000,000
Retained earnings	2,000,000
Total debt and equity	$50,000,000

The bonds have a 7.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 15 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of Fred and Sam's debt?