The 14-year, $1,000 par value bonds of Waco Industries pay 12 percent interest annually. The market price of the bond is $1,115, and the market's required yield to maturity on a comparable-risk bond is 9 percent.
Compute the bond's yield to maturity.
Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.
Should you purchase the bond?