Fingen’s 12-year, $1,000 par value bonds pay 14 percent interest annually. The market price of the bonds is $1,050 and the market’s required yield to maturity on a comparable-risk bond is 12 percent.
a. Compute the bond’s yield to maturity.
b. Determine the value of the bond to you, given your required rate of return.
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c. Should you purchase the bond?
What is your yield to maturity on the Fingen bonds given the market price of the bonds?
% (Round to two decimal places.)