Question
(Bond valuation)Fingen's 16-year, $1000 par value bonds pay 12 percent interest annually. The market price of the bonds is $1,120 and the market's required yield
(Bond valuation)Fingen's 16-year, $1000 par value bonds pay 12 percent interest annually. The market price of the bonds is $1,120 and the market's required yield to maturity on a comparable-risk bond is 9 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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The Commercial Aircraft Finance Handbook
Authors: Ronald Scheinberg
2nd Edition
1138558990, 978-1138558991
