Question

The seven-year $1,000 par bonds of Vail Inc. pay 9 percent interest. The market’s required yield to maturity on a comparable-risk bond is 7 percent. The current market price for the bond is $1,100.
a. Determine the yield to maturity.
b. What is the value of the bond 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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  • CreatedOctober 31, 2014
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