The 15-year 1000 par bonds of vail inc pay 12 percent


Question - The 15-year $1,000 par bonds of Vail Inc. pay 12 percent interest. The market's required yield to maturity on a comparable-risk bond is 14 percent. The current market price for the bond is $ 950.

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?

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