Bond valuation​ relationships) The 11​-year, ​$1,000 par value bonds of Waco Industries pay 6 percent interest annually. The market price of the bond is ​$865​, and the​ market's required yield to maturity on a​ comparable-risk bond is 9 percent.   a.  Compute the​ bond's yield to maturity.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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 ​(Bond valuation​ relationships) The 11​-year, ​$1,000 par value bonds of Waco Industries pay 6 percent interest annually. The market price of the bond is ​$865​, and the​ market's required yield to maturity on a​ comparable-risk bond is 9 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?
 
 
  What is your yield to maturity on the Waco bonds given the current market price of the​ bonds? 
______% ​ (Round to two decimal​ places.)
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