Determining the value of bond issue currently under review

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Your boss has indicated that he would like your help in determining the value of a bond issue currently under review. The firm has bonds outstanding that have four (04) years remaining to maturity, a coupon interest rate of 10 percent paid annually, and a $1,000 par value. [Show work please]

a. What is the yield to maturity on the bond issue if the current market price is $829?

b. What is the yield to maturity on the bond issue if the current market price is $1,104?

c. Would you be willing to buy one of these bonds for $829 if you required a 12 percent rate of return on the bonds issue? Explain your answer.

Reference no: EM131346990

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