Orange Inc is currently having a temporary difficulty in paying its outstanding loans; therefore, the court permits

Orange Inc is currently having a temporary difficulty in paying its outstanding loans; therefore, the court permits the company to draw a new indenture on its outstanding bonds. These bonds have remaining 10 years to maturity and a coupon rate of 10 percent, paid annually. The new agreement allows the firm to pay no interest for the first 3 years. Then, interest payments will resume for the next 7 years as usual. At maturity (Year 10), in addition to the usual payment of interest and face value, the accumulated amount of interest that was not paid during the first 3 years will be paid in one lump sum. If the market required return is 20%, how much should these bonds sell for in the market today?


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