Burns coupon rate is %15, semiannual, maturity date 2021 bonds are sold for $660. The bonds pay interest semiannually. If in 2001 your required rate of return for such bonds is 20%, would you buy Burns bonds?
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:
Burns coupon rate is %15, semiannual, maturity date 2021 bonds are sold for $660. The bonds pay interest semiannually. If in 2001 your required
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