Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 6.5%, payable annually, and a par value of $1,000. The 1-year interest rate is 6.5%. Next year, there...

Williams Industries has decided to borrow money by issuing perpetual bonds with a coupon rate of 6.5%, payable annually, and a par value of $1,000.  The 1-year interest rate is 6.5%.  Next year, there is a 35% probability that interest rates will increase to 8% and a 65% probability that they will fall to 5%.

If the bonds are callable one year from today at $1,080, what will the market value of these bonds be?