(Bond valuation relationships). The 19-year, $1000 par value bond of Waco industries pay 6% interest annually. The market price of the bond is $1145, and the market's required yield to maturity on a comparable-risk bond is 3%.
a. Compute the bonds yield to maturity.
b. Determine the value of the bond to you give in the markets required yield to maturity on a comparable-risk bond. -----------------------------
a. What is your yield to maturity on the Waco bonds given the current market price of the bonds? ________%
b. What should be the value of the Wego bonds given the market's required yield to maturity on a comparable risk bond? $_______.