A coupon bond pays this amount every 6 months;   $             30.00 bgs         for the number of payments/year;                         2         The bond also pays at maturity the par (face) value;  $       1,000.00         Number of years until maturity                         15         The required return of holders of this bond is;  8.00% bgs     a) What is the PV of the CFs, or what would be the fair price to purchase this bond?                       b) If the required return of holders of this bond is;  6.00% bgs       What is the PV of the CFs, or what would be the fair price to purchase this bond?                       c) If the required return of holders of this bond is;  4.00%         What is the PV of the CFs, or what would be the fair price to purchase this bond?  to purchase this bond?

Q: You are considering the purchase of a $1,000 par value bond with a coupon rate of 5.7% (with…

A: The price of bonds is the present value of the interest annuity & maturity amount at market rate…

Q: Consider a bond with a principal of $1,000 that pays a coupon of $100 per year. If the bond matures…

A: Bond: It is a fixed income instrument that represents a loan made by an investor to a borrower. We…

Q: Suppose a thirty-year bond with a $10,000 face value pays a 0.0% annual coupon (at the end of the…

A: When discount rate is 0 value of bond is sum of cash flow from the bond

Q: Calculate the value of a fixed-rate bond with fifteen years left to maturity, annual coupon payments…

A: Given data; face value = $1000 coupon rate = 5% yield to maturity = 3.5% years to maturity = 15…

Q: An investor wants to find the duration of a(n) 10-year, 7% semiannual pay, noncallable bond that's…

A: Duration of bond is the weighted period of bond required to recover all cash flow from the bond and…

Q: An investor wants to find the duration of a(n) 15-year, 6% semiannual pay, noncallable bond that's…

A: Bond duration of the bond can be found by using DURATION function in the Excel sheet where the…

Q: 9 Weatherhead Bakery is issuing a bond with 10 year maturity and annual coupon payments of $80. The…

A: A bond is a debt instrument where a loan (in the form of bond price) is received by a company, which…

Q: tations theory suggests that under certain conditions all bonds outstanding, especially Treasury…

A: Zero coupon do not pay any coupon during the life of bond but pay only face value of bond on…

Q: Consider the following coupon bond issued by XYZ.inc Term: 3 years Payment: 75 Face Value: 1,000…

A: Given information : Time period = 3 years Periodic payments = 75 Face value = 1000 Risk free rate =…

Q: An investor wants to find the duration of a(n) 15-year, 6% semiannual pay, noncallable bond that's…

A: Effective duration refers to the time taken for the options to be embedded which shows the cash flow…

Q: A bond you are evaluating has a 10 percent coupon rate (compounded semiannually), a $1,000 face…

A: Bonds are the securities issued by the entity in order to raise finance. These are an obligation on…

Q: A two-year bond pays a coupon rate of 10 percent and has a face value of $1,000. (In other words,…

A: Answer  YTM = {interes + (maturity value- current price )/n}/(maturity value- current price )/2

Q: You have been given the following information for an existing bond that provides coupon payments.…

A: Present avlue is a current value of future cash flow at specified rate of interest. It is helpful in…

Q: he term structure for zero-coupon bonds is currently: aturity Years) YTM (%) 1 4.7% 2 5.7 3 6.7 Next…

A: Maturity (Years)YTM(%)14.7%25.7%36.7%Next year, at this time, expectsMaturity…

Q: An investor wants to find the duration of a(n) 30-year, 9% semiannual pay, noncallable bond that's…

A: Par value$1,000Coupon rate9%Years to maturity30 yearsYTM14%Bond price649.02Yield changes0.5%

Q: 5)Considering the following: 8 year, semi-annual bond, 0.095 YTM, 997 current price. Par is 1000…

A: Step 1 The interest rate on a bond or fixed-income asset is known as the coupon rate. When the bond…

Q: What are the yield to maturity on a three-year bond whose face value is $1000 with a coupon rate of…

A: The bond price and the yield to maturity are important elements of the bond valuation. The yield to…

Q: A bond promises to pay you $7,000.00 in earn 6 percent on securities of equal risks, what would be…

A: The present value of the bond shall be equal to the face value of the bond discounted at the…

Q: According to the expectations theory, what will be the interest rate on a three-year bond if the…

A: Interest rate of long term bonds are higher than short term bonds

Q: 5) You purchase a 30 year bond with nominal semiannual coupon rate 7% and nominal semiannual yield…

A: Step 1:Step 2:Step 3:

Q: An investor wants to find the duration of a(n) 10-year, 6% semiannual pay, noncallable bond that's…

A: Duration of bond is the weighted period of bond required to recover all cash flow from the bond and…

Q: Consider a 15-year semiannual floating rate bond with coupon rate determined with the following…

A: Given information,Compounding frequency: Semi annualNPER:  yearsReference rate: Par value: Bond…

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: