A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par value. Which of the following statement is correct? Select one: a. The bond's current yield is less than 10%. b. If the yield to maturity increases, then the bond's price will increase. c. The bond's coupon rate is less than 10%. d. The bond's coupon rate is equal to 10%
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:
A 10-year bond pays an annual coupon, its YTM is 10%, and it currently trades at a par value. Which of the following statement is correct?
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