Suppose you purchase a zero coupon bond with a face value of 10,000 maturing in 10 years, for $3,700. Zero coupon bonds pay the investor the face value on the maturity date. What is the implied dollar interest you would earn in the first year of the bond’s life? Select one: $370.00 $380.00 $386.78 $1,000.00 $256.72
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:
Suppose you purchase a zero coupon bond with a face value of 10,000 maturing in 10 years, for $3,700. Zero coupon bonds pay the investor the face value on the maturity date. What is the implied dollar interest you would earn in the first year of the bond’s life?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
