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(Bond valuation) Fingen's 14-year, $1,000 par value bonds pay 15 percent interest annually. The market price of the bonds is $930 and the market's required
(Bond valuation)Fingen's
14-year,
$1,000
par value bonds pay
15
percent interest annually. The market price of the bonds is
$930
and the market's required yield to maturity on a comparable-risk bond is
18
percent.
a.Compute the bond's yield to maturity.
b.Determine the value of the bond to you, given your required rate of return.
c.Should you purchase the bond?
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