Question
Fingen's 15-year, $1,000 par value bonds pay 13 percent interest annually.The market price of the bonds is $1,080 and the market's required yield to maturity
Fingen's 15-year, $1,000 par value bonds pay 13 percent interest annually.The market price of the bonds is $1,080 and the market's required yield to maturity on a comparable-risk bond is 10 percent.
a. What is your yield to maturity on the Fingen bonds given the market price of the bonds?
_______%(Round to two decimal places.)
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.)
c. You should/should not purchase the Fingen bonds because they are currently underpriced/overpriced
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