Ordinary bonds of CenterPoint Energy Inc. mature in 18 years and pay coupons twice per year. What is today’s quoted price for this CenterPoint Energy bond if the next coupon will be disbursed in exactly six months? Note: the YTM = 9.65% and the CenterPoint Energy bond annual coupon rate is 9.0%. a. $1,183.34 b. $1,706.64 c. $1,761.65 d. $944.99 e. $1,249.94
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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Ordinary bonds of CenterPoint Energy Inc. mature in 18 years and pay coupons twice per year. What is today’s quoted price for this CenterPoint Energy bond if the next coupon will be disbursed in exactly six months? Note: the YTM = 9.65% and the CenterPoint Energy bond annual coupon rate is 9.0%. a. $1,183.34
b. $1,706.64
c. $1,761.65
d. $944.99
e. $1,249.94
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