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Mr. Warren Buffet calls his broker to inquire about purchasing a bond of Amazon Inc. His broker quotes a price of $1,150. Mr. Warren is
Mr. Warren Buffet calls his broker to inquire about purchasing a bond of Amazon Inc. His broker quotes a price of $1,150. Mr. Warren is concerned that the bond might be overpriced based on the facts involved. The $1,000 par value bond pays 12 percent and it has 20 years remaining until maturity. The current yield to maturity on similar bonds is 11 percent. Do you think the bond is overpriced in the market? Do the necessary calculations
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