Question: Jim Smith calls his broker to inquire about purchasing a bond of Coca Cola. His broker quotes a price of $1,200. Jim is concerned that the bond might be overpriced based on the facts involved. The $1,000 part value bond pays 15% interest, and has 20 years remaining until maturity. The current yield to maturity on similar bonds is 12%. Compute the new price of the bond and comment whether you think the bond is overpriced in the market.