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(Solution document) Fingen's 15-year, $1,000 par value bonds pay 13 percent interest annually.


Fingen's 15?-year, ?$1,000 par value bonds pay 13 percent interest annually. The market price of the bonds is ?$1,080 and the? market's required yield to maturity on a? comparable-risk bond is 10 percent.

 

 a. What is your yield to maturity on the Fingen bonds given the market price of the? bonds?

_______?% ?(Round to two decimal? places.)

b. What should be the value of the Fingen bonds given your required rate of return on a? comparable-bond?  $______?(Round to the nearest? cent.)

c. You should/should not purchase the Fingen bonds because they are currently underpriced/overpriced

 







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