The 8-year $1,000 par bonds of Vail Inc. pay 11 percent interest. The market's required yield to maturity on a comparable-risk bond is 7 percent. The current market price for the bond is $1,120

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? And is it because it is underpriced or overpriced?