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The 12-year $1,000 par bonds of Vail Inc. pay 14 percent interest. The market's required yield to maturity on a comparable-risk bond is 17 percent.

The 12-year $1,000 par bonds of Vail Inc. pay 14 percent interest. The market's required yield to maturity on a comparable-risk bond is 17 percent. The current market price for the bond is $900.

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 bond?

c.Should you purchase the bond at the current market price?

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