a. Semiannual cash flows will be -$9,600, $300, $300, $300, and $9,900, and the bond will earn more than 10% b. Semiannual cash flows will be -$9,600, $300, $300, $300, and $9,900, and the bond will earn less than 10% c. Semiannual cash flows will be -$9,600, $300, $300, $300, and $10,300, and the bond will earn more than 10% d. Semiannual cash flows will be -$9,600, $300, $300, $300, and $10,300, and the bond will earn less than 10%
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:
You purchase a $10,000 bond with a bond rate of 6% per year payable semiannually for 2 years. You pay $9,600 for the bond. Which statement is correct?
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