Ultra-High Company Ltd is considering a bond issue. After significant deliberations, the
firm decides to issue zero-coupon bonds which matures in 5 years, with a face value of $1,000
and priced at $580. You want to know your potential yield before buying into the bonds. The
only way is to compute the yield to maturity (YTM). If other bonds of the same risk class are
offering 13%, would you invest in Ultra High’s bonds?