Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually. What is the amount of interest payments every 6 months? An investor would be willing to pay an amount (equal to, more than, less than) the face value for this bond. (pick one) The bonds were issued at (par, a discount, a premium).
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:
Beluga Inc. issued 10-year bonds with a face value of $100,000 and a stated rate of 4% when the market rate was 6%. Interest was paid semi-annually.
- What is the amount of interest payments every 6 months?
- An investor would be willing to pay an amount (equal to, more than, less than) the face
value for this bond. (pick one) - The bonds were issued at (par, a discount, a premium).
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