A bond pays 10% semi-annual coupons with a face and redemption value of 1000. The bond can be redeemed on an coupon date between 12 and 15 years (inclusive) from the issue date. 1. Find the price payed at issue if investment has a minimum annual effective yield of 8%.
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 bond pays 10% semi-annual coupons with a face and redemption value of 1000. The bond can be redeemed on an coupon date between 12 and 15 years (inclusive) from the issue date. 1. Find the price payed at issue if investment has a minimum annual effective yield of 8%.
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