(Related to Checkpoint 9.2 and Checkpoint 9.3)(Bond valuation)Fingen's

12-year,

$1,000

par value bonds pay

14

percent interest annually. The market price of the bonds is

$870

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

18

percent.

a.Compute the bond's yield to maturity.

b.Determine the value of the bond to you, given your required rate of return.

c.Should you purchase the bond?