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CMS Corporation's Balance Sheet as of Today Is as Follows

question 115

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CMS 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\begin{array}{lr}\text { Long-term debt (bonds, at par) } & \$ 10,000,000 \\\text { Preferred stock } & 2,000,000 \\\text { Common stock (\$10 par) } & 10,000,000 \\\text { Retained earnings } & 4,000,000 \\\hline \text { Total debt and equity } & \$ 26,000,000\end{array}
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?

Understand the procedure and application of the sign test for median.
Comprehend the relationship between sample size, standard deviation, and margin of error in estimating parameters.
Use hypothesis testing to compare sample means to known population means.
Understand the concept and application of the sign test for median.

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