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(Bond valuation relationships) The 16-year $1,000 par value bonds of Waco Industries pay 11% interest annually. The market price of the bond is $1,095, and the market's required yield to maturity on a comparable-risk bond is 8%
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?
a. What is your yield to maturity on the Waco bonds given the current market price of the bonds 9.80% (Round to two decimal places.)
b. What should be the value of the Waco bonds given the market's required yield to maturity on a comparable-risk bond? $( ) (Round to the nearest cent.)
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