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Determining the bond valuation relationships

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(Bond valuation relationships) The 13-year, $1,000 par value bonds of Waco Industries pay 8 percent interest annually. The market price of the bond is $1,065, and the market's required yield to maturity on a comparable-risk bond is 6 percent.

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?

Reference no: EM131402488

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