You are interested in valuing bonds issued by Tropez, Inc. The bonds in question will mature in eight years and have a six percent coupon rate. Coupons are paid semi-annually. In determining the bond price, you assume the yield to maturity is 5%, which is the yield for another firm's currently trading bonds that you perceive to be of equal risk.

a. Based on these estimates, what should be the current price of a Tropez, Inc. bond?

b. If Tropez bonds are currently trading at $1,050 apiece, would you buy the bonds?