The current stock price for a company is $42 per share, and there are 4 million

Question

The current stock price for a company is $42 per share, and there are 4 million shares outstanding. This firm also has 60,000 bonds outstanding, which pay interest semiannually. If these bonds have a coupon interest rate of 8%, 23 years to maturity, a face value of $1,000, and an annual yield to maturity of 6.6%, what is the total market value of this firm? (Answer to the nearest dollar, but do not use a dollar sign).

I know that the answer is 237,868,889 , but I don't know how to calculate that answer.

Explanation / Answer

value of firm:

= Market value of debt+Market value of equity

= $1,164.48*60,000+$42*4,000,000

= $237,868,800

Face value (FV) $                                         1,000 Coupon rate 8.00% Number of compounding periods per year 2 Interest per period (PMT) $                                               40 Number of years to maturity 23 Number of compounding periods till maturity (NPER) 46 Market rate of return/Required rate of return 6.60% Market rate of return/Required rate of return per period (RATE) 3.30% Bond price PV(RATE,NPER,PMT,FV)*-1 Bond price $                                   1,164.48

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