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The 11-year $1,000 par bonds of Vail Inc pay 12 percent interest. The markets required yield to maturity on a comparable-risk bond is 15 percent.
The 11-year $1,000 par bonds of Vail Inc pay 12 percent interest. The markets required yield to maturity on a comparable-risk bond is 15 percent. The current market price for the bond is $920.
A: Determine the yield to maturity.
B: What is the value of the bonds to you given the yield to maturity on a comparable-risk home?
C: Should you purchase the bond at the current market price?
Please answer for A, B and C.
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