Apple has 8 percent coupon bonds on the market with ten years to maturity. The bonds make semiannual payments and currently sell for 95 percent of par Is this a discount bond or premium bond? Should YTM be higher than the coupon rate, or lower? What is the YTM of this bond in percentage? (keep two decimal points, for example, if your answer is 2.34%, write 2.34 as the answer) What is the current yield of this bond in percentage? (keep two decimal points, for example, if your answer is 2.34%, write 2.34 as the answer) What is the EAY of this bond in percentage? (keep two decimal points, for example, if your answer is 2.34%, write 2.34 as the answer)
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:
Apple has 8 percent coupon bonds on the market with ten years to maturity. The bonds make semiannual payments and currently sell for 95 percent of par
- Is this a discount bond or premium bond?
- Should YTM be higher than the coupon rate, or lower?
- What is the YTM of this bond in percentage? (keep two decimal points, for example, if your answer is 2.34%, write 2.34 as the answer)
-
What is the current yield of this bond in percentage? (keep two decimal points, for example, if your answer is 2.34%, write 2.34 as the answer)
- What is the EAY of this bond in percentage? (keep two decimal points, for example, if your answer is 2.34%, write 2.34 as the answer)
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