A bond with a face value of P1,000 that will matures in 10 years. It pays a P50 coupon every year, and it can be called in 5 years at a call price of P1,200. The annual current yield of this bond is 4%. Determine the bond’s nominal yield to call. (In percentage, put percentage sign)
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 with a face value of P1,000 that will matures in 10 years. It pays a P50 coupon every year, and it can be called in 5 years at a call price of P1,200. The annual current yield of this bond is 4%. Determine the bond’s nominal yield to call. (In percentage, put percentage sign)
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