Question: # 7 ( Bond valuation ) Fingen ' s 1 2 - year, $ 1 comma 0 0 0 par value bonds pay 1 2

#7(Bond valuation)Fingen's 12-year, $1 comma 000 par value bonds pay 12 percent interest annually. The market price of the bonds is $870 and the market's required yield to maturity on a comparable-risk bond is 16 percent.
a.Compute the bond's yield to maturity.
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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