Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be redeemed at par. Face Value: $5000 Bond Rate Payable Semi-annually: 5% Time Before Maturity: 9 years Market Quotation 102.25
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:
Use the method of averages to find the approximate yield rate for the bond shown in the table below. The bond is to be redeemed at par.
Face Value: $5000
Bond Rate Payable Semi-annually: 5%
Time Before Maturity: 9 years
Market Quotation 102.25
Step by step
Solved in 2 steps
