Health Corp bonds have 7 years remaining to maturity. The bonds have a face value of $1000 and a yield to maturity of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield?
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:
Health Corp bonds have 7 years remaining to maturity. The bonds have a face value of $1000 and a yield to maturity of 8%. They pay interest annually and have a 9% coupon rate. What is their current yield?
Step by step
Solved in 4 steps with 2 images
