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(Solution document) The 14-year, $1,000 par value bonds of Waco Industries pay 11 percent interest annually.


The 14?-year, $1,000 par value bonds of Waco Industries pay 11 percent interest annually. The market price of the bond is $1,125?, and the? market's required yield to maturity on a? comparable-risk bond is 8 percent.

 

a. Compute the? bond's yield to maturity. (Round to two decimal places.)

 

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 the? bond?

 







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