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The 14​-year, ​$1,000 par value bonds of Waco Industries pay 9 percent interest annually. The market...

The 14​-year, ​$1,000 par value bonds of Waco Industries pay 9 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 7 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?

a.  What is your yield to maturity on the Waco bonds given the current market price of the​ bonds?

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Answer #1

Yield formula:=YIELD(B6,B7,B3,106.5,100,1,0)

Present Value Formula:

=-PV(B5,B4,90,B2,0)

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