Consider the bond issued by Walmart with maturity date of 2013 and a stated annual coupon rate of 4.55% . In December 2009, with 4 year left to maturity, investors owning the bonds were only requiring a 6% rate of return. calculate the value of bonds. Consider a bond issued by Toyota with a maturity date of 2010 and a stated coupon of 4.35%. In December 2005, with 5 years left to maturity, investors owning the bonds are requiring a 4% rate of return.
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:
Consider the bond issued by Walmart with maturity date of 2013 and a
stated annual coupon rate of 4.55% . In December 2009, with 4 year
left to maturity, investors owning the bonds were only requiring a 6%
of return
Consider a bond issued by Toyota with a maturity
date of 2010 and a stated coupon of 4.35%. In
December 2005, with 5 years left to maturity,
investors owning the bonds are requiring a 4% rate
of return.
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