A 10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5% . Assuming semi annual coupon payment, calculate the price of the bond. A twenty year bond is currently selling at $850 and current yield is 8%. What coupon rate offered by company
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 with 12.5% coupon rate and $1000 face value yield to maturity is 14.5% . Assuming semi annual coupon payment, calculate the price of the bond.
A twenty year bond is currently selling at $850 and current yield is 8%. What coupon rate offered by company?
Note: do not solve on excel
Trending now
This is a popular solution!
Step by step
Solved in 2 steps