 The 15​-year ​$1 comma 000 par bonds of Vail Inc. pay 8 percent interest.  The​ market's required yield to maturity on a​ comparable-risk bond is 11 percent.  The current market price for the bond is $ 910.
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?                                                     only answers do not show steps

a. Yield to maturity: 9.15%

b. Value of the bond: $796.15

c. No, you should not purchase the bond at the current market price of $910.

Would you like details or have any questions? Here are 5 related questions you might find interesting:

1. How does the coupon rate affect the bond's price?
2. What is the relationship between bond prices and interest rates?
3. How do you calculate the current yield of a bond?
4. What factors influence the yield to maturity of a bond?
5. How does the time to maturity impact the value of a bond?

**Tip:** Always compare the yield to maturity with the market's required yield to determine if a bond is a good investment.

The 15​-year ​$1,000 par bonds of Vail Inc. pay 8 percent interest. The​ market's required yield to maturity on a​ comparable-risk bond is 11 percent. The current market price for the bond is $910. 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?

Discover how to calculate the yield to maturity (YTM) and determine the value of a 15-year $1,000 par bond issued by Vail Inc., which pays 8% interest. Given a market's required YTM of 11% and a market price of $910, learn whether this bond is a good investment. Suitable for undergraduate finance students.

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