Question
(Bond valuation) Fingen's 18-year, $1,000 par value bonds pay 12 percent interest annually. The market price of the bonds is $1,130 and themarket's required yield
(Bond valuation)Fingen's 18-year, $1,000 par value bonds pay 12 percent interest annually. The market price of the bonds is $1,130 and themarket's required yield to maturity on acomparable-risk bond is 9 percent.
a. Compute thebond's yield to maturity.
b.Determine the value of the bond toyou, given your required rate of return.
c.Should you purchase thebond?
Round to Two Decimal Places
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
