(Valuing bonds) (Related to Checkpoint 9.2 on page 298 and Checkpoint 9.3 on page 302) The seven-year $1,000 par bonds of Vail Inc. pay 9 percent interest. The market’s required yield to maturity on a comparable-risk bond is 7 percent. The current market price for the bond is $1,100.

a. Determine the yield to maturity.

b. What is the value of the bond to you, given the yield to maturity on a comparablerisk bond?

c. Should you purchase the bond at the current market price?