Question: Fingen's 1 2 - year, $ 1 0 0 0 par value bonds pay 1 1 percent interest annually. The market price of the bonds

Fingen's

12 -

year, $

1000

par value bonds pay

11

percent interest annually. The market price of the bonds is $

1050

and the market's required yield to maturity on a comparable

-

risk bond is

9

percent. Compute the bond's yield to maturity. Determine the value of the bond to you, given your required rate of return. Should you purchase the bond?

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