# Question: The 15 year 1 000 par value bonds of Waco Industries pay

The 15-year, $1,000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is $1,085, and the market’s required yield to maturity on a comparable-risk bond is 10 percent.

a. Compute the bond’s yield to maturity.

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?

a. Compute the bond’s yield to maturity.

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?

## Answer to relevant Questions

You own a bond that pays $100 in annual interest, with a $1,000 par value. It matures in 15 years. The market’s required yield to maturity on a comparable-risk bond is 12 percent.a. Calculate the value of the bond.b. How ...What would you expect the nominal rate of interest to be if the real rate is 4.5 percent and the expected inflation rate is 7.3 percent?The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years.a. If your required rate of return is 10.5 percent, what is the value of ...Assume the following:• The investor’s required rate of return is 13.5 percent,• The expected level of earnings at the end of this year (E1) is $6.00,• The retention ratio is 50 percent,• The return on equity (ROE) ...Big Steve’s, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $100,000 and will generate net cash inflows of $18,000 per year for ...Post your question