d with a 9% annual coupon has an 8 percent yield to maturity. Which of the comments below is the most accurate? a. The bond is being sold at a reduced price. b. The current yield on the bond is greater than 9%. c. If the yield to maturity is stable, the bond's price would be lower one year from now than it is now. d. Both a and b are right statements.
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 10-year bond with a 9% annual coupon has an 8 percent yield to maturity. Which of the comments below is the most accurate?
a. The bond is being sold at a reduced price.
b. The current yield on the bond is greater than 9%.
c. If the yield to maturity is stable, the
d. Both a and b are right statements.
e. None of the above claims are true.
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