(Bond valuation relationships) The

17-year,

$1,000

par value bonds of Waco Industries pay

9

percent interest annually. The market price of the bond is

$895,

and the market's required yield to maturity on a comparable-risk bond is

12

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?