?(Bond valuation?)

National? Steel's 10-year, ?$1,000 par value bonds pay

8 percent interest annually. The market price of the bonds is

?$1,200?, and your required rate of return is 7 percent.

a. Compute the? bond's expected rate of return.

b. Determine the value of the bond to? you, given your required rate of return.

c. Should you purchase the? bond?