The 15-year $1000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is $905, and the market's required yield to maturity on a comparable-risk bond is 11 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 this bond?
(answers all with 2 decimal places please, thanks!)
(Related to Checkpoint 92 9.3)
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