Fely Corporation issued a P100,000, 14 percent, 15-year bond at 98. The call price is 104. Seven years after issue the bond is called. What is the call premium?
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:
About Call Premium.
Fely Corporation issued a P100,000, 14 percent, 15-year bond at 98. The call price is 104. Seven years after issue the bond is called. What is the call premium?
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