5. A coupon bond has a $1000 face value and a 12% coupon rate. It is currently sold at 5940 and is expe cted to be sold at 5960 next year. What is the yield to maturity and the expected rate of capital gain? lf the inflation rate is 4%, what is the real interest rate on this bond? 6. Suppose the Fed is about to have a new chair who thinks the current rate of money growth is too fast. Discuss all the possible scenarios for what will happen to interest rates
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
5. A coupon bond has a $1000 face value and a 12% coupon rate. It is currently sold at 5940 and is expe cted to be sold at 5960 next year. What is the yield to maturity and the expected rate of
6. Suppose the Fed is about to have a new chair who thinks the current rate of money growth is too fast. Discuss all the possible scenarios for what will happen to interest rates
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