value bonds

discount​ bonds
June 28, 2019
Abner​ Corporation’s bonds
June 28, 2019

Fingen’s 12-year, $1,000 par value bonds pay 9 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 7 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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