(Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 16-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $905, and themarket's required yield to maturity on acomparable-risk bond is 10 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.)