corporation issues $3,000,000 of 8%, 10-year bonds, interest payable semiannually. At the time the bonds are issued, the market rate is 12%. Determine the present value of bonds at issuance using the present value table below. Show computations in good form. Present Value of Principal: PV of annuity: PV of Bond Payable=
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 corporation issues $3,000,000 of 8%, 10-year bonds, interest payable semiannually. At the time the bonds are issued, the market rate is 12%. Determine the present
Present Value of Principal:
PV of annuity:
PV of Bond Payable=
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