Related to Checkpoint 9.2 and Checkpoint 9.3)(Bond valuation relationships) The

15-year,

$1,000

par value bonds of Waco Industries pay

9

percent interest annually. The market price of the bond is

$1,105,

and the market's required yield to maturity on a comparable-risk bond is

6

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?

(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 15-year, $1,000 par value bonds of Waco Industries pay 9 percent interest annually. The market price of the bond is $1,105, and the market's required yield to maturity on a comparable-risk bond is 6 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