# Question

National Steel 15- year, $ 1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $ 1,085, and your required rate of return is 7 percent.

a. Compute the bond’s expected rate of return.

b. Determine the value of the bond to you, given your required rate of return.

c. Should you purchase the bond?

a. Compute the bond’s expected rate of return.

b. Determine the value of the bond to you, given your required rate of return.

c. Should you purchase the bond?

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