Question
(Bond valuation) Fingen's 15-year, $1,000 par value bonds pay 13 percent interest annually. The market price of the bonds is $1,140 and the market's required
(Bond valuation)Fingen's 15-year, $1,000 par value bonds pay 13 percent interest annually. The market price of the bonds is $1,140 and the market's required yield to maturity on a comparable-risk bond is 10 percent.
a.Compute the bond's yield to maturity.
11.05%
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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School Finance A Policy Perspective
Authors: Allan Odden, Lawrence Picus
6th Edition
1259922316, 9781259922312
