(Bond valuation relationships) The 15-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $1,105, and the market's required yield to maturity on a comparable-risk bond is 4 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?