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:
Venice Skate Parks, Inc. (VSPI) has 15 million shares of common stock outstanding that trade for $9.35/ share. The yield to maturity on 10-year US Treasury Bonds is 3.00%. VSPI's equity beta is 1.4. The expected return on the market is 11.00%. VSPI's bonds have a 6.50%/yr. coupon rate, $1,000 face value, & semi-annual coupons, maturity of 14 years. VSPI has 50,000 bonds outstanding, currently priced at $935.00/ bond. VSPI’s tax rate is 30%. Calculate weighted-average cost of capital for this firm
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