Question: the 1 3 - year, $ 1 , 0 0 0 par value bonds of Waco Industries pay 1 2 percent interest annually. The market

the 13-year, $1,000 par value bonds of Waco Industries pay 12 percent interest annually. The market price of the bond is $875, and the market's required yield to maturity on a comparable-risk bond is 13 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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