Question
(Bond valuation)Fingen's 15-year, $ 1000 par value bonds pay9 percent interest annually. The market price of the bonds is $1050 and the market's required yield
(Bond valuation)Fingen's 15-year, $ 1000 par value bonds pay9 percent interest annually. The market price of the bonds is $1050 and the market's required yield to maturity on a comparable-risk bond is7 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?
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Fundamentals Of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
13th Edition
978-0134083308, 013408330X
