Question: How would I put this into a BAII Plus (Finance) Calculator and solve it? In order to accurately assess the capital structure of a firm,

How would I put this into a BAII Plus (Finance) Calculator and solve it?

In order to accurately assess the capital structure of a firm, it is necessary to convert its balance sheet figures to a market value basis. KJM Corporation's balance sheet as of today is as follows:

Long-term debt (bonds, at par) $10,000,000
Preferred stock 2,000,000
Common stock ($10 par) 10,000,000
Retained earnings 4,000,000
Total debt and equity $26,000,000

The bonds have a 4.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt?

a. $5,276,731

b. $5,412,032

c. $5,547,332

d. $7,706,000

e. $7,898,650

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