John purchases a bond with a $10,000 face value, a coupon rate of 6% and a 15 year maturity. Immediately before the 4th coupon payment, John sells the bond to Sally. At that time, the interest rate is 9%. What price can John expect to receive from Sally for the bond? Choose the answer within $50 of the following value. 8658 7958 8158 8058 None of the above 8558
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:
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