Question: ( Bond valuation relationships ) The 1 7 - year, $ 1 , 0 0 0 par value bonds of Waco Industries pay 7 percent

(Bond valuation relationships) The 17-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is
$1,105, and the market's required yield to maturity on a comparable-risk bond is
5 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?

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