A $300,000 issue of eleven-year bonds redeemable at par offers 6.19% coupons payable semi-annually. What is the premium or discount and the purchase price of the bonds to yield 7.5% compounded monthly? Question content area bottom Part 1 (a) The ▼ discount premium is $enter your response here. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Part 2 (b) The purchase price of the bond is $enter your response here.
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
$300,000
issue of
eleven-year
bonds redeemable at
par
offers
6.19%
coupons payable
semi-annually.
What is the premium or discount and the purchase price of the bonds to yield
7.5%
compounded monthly?
Question content area bottom
Part 1
(a) The
▼
discount
premium
is
$enter your response here.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Part 2
(b) The purchase price of the bond is
$enter your response here.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Please answer both subparts.
I will really upvote.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
