Q11 : (Bond valuationrelationships) The 18

18-year, $1 comma 000

1,000 par value bonds of Waco Industries pay 11

11 percent interest annually. The market price of the bond is $1 comma 145

1,145, and themarket's required yield to maturity on acomparable-risk bond is 8

8 percent.

a.Compute thebond's yield to maturity.

b.Determine the value of the bond to you given themarket's required yield to maturity on acomparable-risk bond.

c.Should you purchase thebond?