Michalleti Marketing Consulting Ltd issued Gh¢500million of zero-coupon bonds with ex-interest of Gh¢120, due for repayment in 5years time at par. Its current market price is Gh¢105. What is the company’s cost of debt capital?
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:
Michalleti Marketing Consulting Ltd issued Gh¢500million of zero-coupon bonds with ex-interest of
Gh¢120, due for repayment in 5years time at par. Its current market price is Gh¢105. What is the
company’s cost of debt capital?
plZ help me sir urgently
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