(Bond valuation relationships) The 15 -year, $1,000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is $925, and the market's required yield to maturity on a comparable-risk bond is 10 percent.

a. Compute the bond's yield to maturity.

b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.

c. Should you purchase the bond?

Question content area bottom

Part 1

a.What is your yield to maturity on the Waco bonds given the current market price of the bonds? ______% (Round to two decimal places.)

Part 2

b. What should be the value of the Waco bonds given the market's required yield to maturity on a comparable-risk bond?

$________(Round to the nearest cent.)

Part 3

c. You ____________purchase the Waco bonds at the current market price because they are currently

____________.