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Determine the yield of maturity

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The 9 year $1,000 par bonds of Vail Inc. pay 11 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 $1,140.

a. Determine the yield of maturity

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

c. Should you purchase the bond at the current market price/ why? Underpriced or overpriced?

Reference no: EM132807148

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