bonds of Vail Inc.

/in /by

The 77​-year $1,000 par bonds of Vail Inc. pay 13 percent interest. The​ market’s required yield to maturity on a​ comparable-risk bond is 9 percent. The current market price for the bond is $1,130.

a. Determine the yield to 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?

 
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