Marwick Corporation issues 8%, 5 year bonds with a par value of $1,200,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%. What is the bond's issue (selling) price, assuming the following Present Value factors: Present Value of an Annuity (series Present value of 1 In= i= of payments) (single sum) 0.6806 3.9927 10 48 8.1109 0.6756 5 6% 4.2124 0.7473 10 38 8.5302 0.7441 Multiple Choice $1,200,000 $989,244 $1,609,450 < Prev 8 of 10 E Next > MacBook Air
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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