Question
(Bond valuation) The 14-year $1,000 par bonds of Vail Inc. pay 9 percent interest. The market's required yield to maturity on a comparable-risk bond is
(Bond valuation)
The 14-year $1,000 par bonds of Vail Inc. pay 9 percent interest. The market's required yield to maturity on a comparable-risk bond is 6 percent. The current market price for the bond is $1,120 .
a.Determine the yield to maturity.
b.What is the value of the bonds to you given the yield to maturity on a comparable-risk bond?
c.Should you purchase the bond at the current market price?
Question content area bottom Part 1
a. What is your yield to maturity on the Vail bonds given the current market price of the bonds? enter your response here% (Round to two decimal places.)
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