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( Related to Checkpoint 9 . 2 and Checkpoint 9 . 3 ) ( Bond valuation relationships ) The 1 6 - year, $ 1

(Related to Checkpoint 9.2 and Checkpoint 9.3)(Bond valuation relationships) The 16-year, $1,000 par value bonds of Waco Industries pay 11 percent interest annually. The
market price of the bond is $855, and the market's required yield to maturity on a comparable-risk bond is 15 percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.
c. Should you purchase the bond?
a. What is your yield to maturity on the Waco bonds given the current market price of the bonds?
%(Round to two decimal places.)
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