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Fingen's 15-year, $1,000 par value bonds pay 13 percent interest annually. The market price of...

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Question

Accounting

Fingen's

15-year,

$1,000

par value bonds pay

13

percent interest annually. The market price of the bonds is

$890

and the market's required yield to maturity on a comparable-risk bond is

16

percent.

a.Compute the bond's yield to maturity.

b.Determine the value of the bond to you, given your required rate of return.

c.Should you purchase the bond?

Answer & Explanation Solved by verified expert
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