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Should purchase the bond at current market price and why

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Reference no: EM132771372

The 10-year ?$1,000 par bonds of Vail Inc. pay 8 percent interest. The market's required yield to maturity on a comparable-risk bond is 5 percent. The current market price for the bond is $1,100.

Problem 1: Determine the yield to maturity.

Problem 2: What is the value of the bonds to you given the yield to maturity on a comparable-risk bond?

Problem 3: Should you purchase the bond at the current market price?

Reference no: EM132771372

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