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Should purchase the bond at the current market price

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The 8 8-year 1,000 par bonds of Vail Inc. pay 13 percent interest. The market's required yield to maturity on a comparable-risk bond is 18 percent. The current market price for the bond is $860.

Question a. Determine the yield to maturity.

Question b. What is the value of the bonds to you given the yield to maturity on a comparable-risk bond?

Question c. Should you purchase the bond at the current market price?

Reference no: EM132486245

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