Identify the types of bond being referred to in the following case: A P5,000,000-face value bond. It requires annual principal payment of P500,000 for ten years. It is secured with the issuing entity’s equipment. a. Straight; Fixed-rated; Junk b. Straight; Zero-coupon; Collateral Trust c. Serial; Fixed-rated; Junk d. Serial; Zero-coupon; Equipment Trust
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:
Identify the types of bond being referred to in the following case: A P5,000,000-face
a. Straight; Fixed-rated; Junk
b. Straight; Zero-coupon; Collateral Trust
c. Serial; Fixed-rated; Junk
d. Serial; Zero-coupon; Equipment Trust
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