Question
8. Fingen's 11-year, $1,000 par value bonds pay 14 percent interest annually. The market price of the bonds is $1,090 and the market's required yield
8. Fingen's 11-year, $1,000 par value bonds pay 14 percent interest annually. The market price of the bonds is $1,090 and the market's required yield to maturity on acomparable-risk bond is 11 percent.
a.Compute the bond's yield to maturity.
b.Determine the value of the bond to you, given your required rate of return.
9. The Saleemi Corporation's $1,000 bonds pay 12 percent interest annually and have 11 years until maturity. You can purchase the bond for $1,155
a.What is the yield to maturity on this bond?
b.Should you purchase the bond if the yield to maturity on a comparable-risk bond is 11 percent?
c.Should you purchase the bond?
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