Calculate the value of a bond that matures in 13 years and has a $1000 par value. The annual coupon interest rate is 14 percent and the market's required yield to maturity on a comparable-risk bond is 15 percent. What is the value of the bond? (round to the nearest cent)
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:
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What is the value of the bond? (round to the nearest cent)
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