At the beginning of current year, Marble Co. issued 10-year bonds with a face amount of P 5,000,000 and a stated interest rate of 8% payable annually at every year - end. The bonds were priced to yield 10%. PV of 1 for 10 periods at 10% 0.3855 PV of an ordinary annuity of 1 for 10 periods at 10% 6.145 1.What is the PV of annual interest payments? 2.What is the total PV of of bonds at time of issuance?
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:
At the beginning of current year, Marble Co. issued 10-year bonds with a face amount of P 5,000,000 and a stated interest rate of 8% payable annually at every year - end. The
1.What is the PV of annual interest payments?
2.What is the total PV of of bonds at time of issuance?
Step by step
Solved in 2 steps
