(Bond valuation)Fingen's

12

-year,

$1 comma 000

par value bonds pay

14

percent interest annually. The market price of the bonds is

$920

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

17

percent.

a.Compute the bond's yield to maturity.

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

c.Should you purchase the bond?

Question content area bottom

Part 1

a.What is your yield to maturity on the Fingen bonds given the market price of the bonds?

15.51

%

(Round to two decimal places.)

Part 2

b.What should be the value of the Fingen bonds given your required rate of return on a comparable-bond?

$

(Round to the nearest cent.)