Define what should be the value of the vail bonds

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(Bond valuation) The 8-year $1,000 par bonds of Vail Inc. pay 12 percent interest. The market's required yield to maturity on a comparable-risk bond is 7 percent. The current market price for the bond is $1,130.

What is your yield to maturity on the Vail bonds given the current market price of the bonds? (Round to two decimal places.)

What should be the value of the Vail bonds given the yield to maturity on a comparable risk bond? (Round to the nearest cent.)

Should you purchase the bond at the current market price?

Reference no: EM131714700

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