Compute the bond yield to maturity

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Reference no: EM131995474

The 15-year, $1,000 par value bonds of Waco Industries pay 11 percent interest annually. The market price of the bond is $1,135, and the market's required yield to maturity on a comparable-risk bond is 8 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?

Reference no: EM131995474

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