Question
Fingen's 18 years , $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $850 and the market's required
Fingen's 18 years , $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $850 and the market's required yield to maturity on a comparable-risk bond is 12 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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Valuation Measuring and managing the values of companies
Authors: Mckinsey, Tim Koller, Marc Goedhart, David Wessel
5th edition
978-0470424650, 9780470889930, 470424656, 470889934, 978-047042470
