Jim Busby calls his broker to inquire about purchasing a bond of Disk Storage Systems. His broker quotes a price of $1,160. Jim is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 14 percent interest, and it has 17 years remaining until maturity. The current yield to maturity on similar bonds is 12 percent. a. Calculate the present value of the bond.

Do you think the bond is overpriced?