New Business Ventures, Inc., has an outstanding perpetual bond with a coupon rate of 12 percent...

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New Business Ventures, Inc., has an outstanding perpetual bondwith a coupon rate of 12 percent that can be called in one year.The bond makes annual coupon payments. The call premium is set at$120 over par value. There is a 60 percent chance that the interestrate in one year will be 14 percent, and a 40 percent chance thatthe interest rate will be 9 percent. If the current interest rateis 12 percent, what is the current market price of the bond? Assumea par value of $1,000. (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)

Current market price $

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New Business Ventures, Inc., has an outstanding perpetual bondwith a coupon rate of 12 percent that can be called in one year.The bond makes annual coupon payments. The call premium is set at$120 over par value. There is a 60 percent chance that the interestrate in one year will be 14 percent, and a 40 percent chance thatthe interest rate will be 9 percent. If the current interest rateis 12 percent, what is the current market price of the bond? Assumea par value of $1,000. (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.) Current market price$