Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 13.47 percent. If these bonds have a market price of $933.16, what yield to maturity and effective annual yield can she expect to earn? (Round answer to 2 decimal places, e.g. 15.25%.) Yield to maturity ___________% Effective annual yield __________%
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:
Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a rate of 13.47 percent. If these bonds have a market price of $933.16, what yield to maturity and effective annual yield can she expect to earn? (Round answer to 2 decimal places, e.g. 15.25%.)
Yield to maturity ___________%
Effective annual yield __________%
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