Fingens 15-year, $1000 par value bonds pay 15 percent interest annually. The market price of the bonds is $1120 and the market's required yield to maturity on a comparable-risk bond is 12 percent.

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

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

c.Should you purchase the bond?

The 15-year $1,000 par bonds of Vail Inc. pay 14 percent interest. The market's required yield to maturity on a comparable-risk bond is 17 percent. The current market price for the bond is $890.

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

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?