bond pays £10 interest each year. Nominal value of the bond is £100. Its last quoted market price was £106.4. What are the coupon rate, current yield and yield to maturity? What would be the coupon that the issuer of the bond would likely set on a new 10 year issue offered while the same market conditions apply?
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:
A 10-year-old bond pays £10 interest each year. Nominal
What would be the coupon that the issuer of the bond would likely set on a new 10 year issue offered while the same market conditions apply?
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