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The Kumar Corporation is planning on issuing bonds that pay no interest but can be converted into $7,000 at maturity, 5 years from their purchase.

The Kumar Corporation is planning on issuing bonds that pay no interest but can be converted into $7,000 at maturity, 5 years from their purchase. To price these bonds competitively with other bonds of equal risk, it is determined that they should yield 16 percent, compounded annually. At what price should the Kumar Corporation sell these bonds?

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