Determine the yield to maturity what is the value of the, Financial Management

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Determine the yield to maturity what is the value of the

Part one. (Bond valuation) The 11-year $1000 par bonds of Vail Inc. pay 12 percent interest. The market's required yield to maturity on a comparable-risk bond is 15 percent. The current market price for the bond is $ 940. (Round to two decimal places.)

a. Determine the yield to maturity.

b. What is the value of the bonds to you given the yield to maturity on a comparable-risk bond?

c. Should you purchase the bond at the current market price?

Part two. (Inflation and interest rates) What would you expect the nominal rate of interest to be if the real rate is 3.6 percent and the expected inflation rate is 7.5 percent?

The nominal rate of interest would be _____%. (Round to two decimal? places.)

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