Bond ABC inc bond currently sells at $960 with 10 yrs to mature at 12% coupon paid semi annually. Its expected to call in year 6 at $1100.Investors required rate of return is 15%. a. Calculate YTM b. Calculate YTC C. Calculate price of the bond in year 2 if market interest rate changes to 13%.

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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: