Joe must pay labilities of 1,000 due six months from now and another 1,000 due one year from now. There are two available investments 1. a 6-month bond with face amount of 1.000, a 10% nominal annual coupon rate convertible semiannually, and a 4 nominal annual yield rate convertible semiannually:and 2. a one-year bond with face amount of 1,000, a 5 nominal annual coupon rate convertible semiannually, and a 6 nominal annual yield rate convertible semiannually. What is Joe's total cost of purchasing the bonds required to exactly (absolutely) match the liablities? OA 1922.76 O B. 2159.83 OC2.385.36 O D. 2.774.91 OE3.092.74

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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: