The 17-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $1,085, and the market's required yield to maturity on a comparable-risk bond is 8 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?

(round to two decimal places)

a.What percent is your yield to maturity on the Waco bonds given the current market price of the bonds?