Suppose that a bond has a face value of 50,000 and it's maturity date is 5 years from now. Find the present value of this bond, assuming that the annual market rate is 4%. * O 48,834.83 O 45,537.84 39,176.31 O 32,458.85 O 42,823.58
Suppose that a bond has a face value of 50,000 and it's maturity date is 5 years from now. Find the present value of this bond, assuming that the annual market rate is 4%. * O 48,834.83 O 45,537.84 39,176.31 O 32,458.85 O 42,823.58
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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:
Question
Transcribed Image Text:Suppose that a bond has a face value
of 50,000 and it's maturity date is 5
years from now. Find the present
value of this bond, assuming that the
annual market rate is 4%. *
O 48,834.83
45,537.84
O 39,176.31
O 32,458.85
O 42,823.58
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