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The 15-year, $1,000 par value bonds of Waco Industries pay 12 percent interest annually. The market price of the bond is $875, and the market's
The 15-year, $1,000 par value bonds of Waco Industries pay 12 percent interest annually. The market price of the bond is $875, and the market's required yield to maturity on a comparable-risk bond is 13 percent.
a.Compute the bond's yield to maturity. (round to two decimal places) b.Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. (round to two decimal places) c.Should you purchase the bond?
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