Use the method of averages to find the approximate yield rate for the bond shown. Face Value: $41,000.00 Bond rate Payable Semi-Annually: 5% Time Before redemption: 9 years 6 months Redeemed at: par Marked Quotation: 98.125 Round final answer to nearest cent.
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:
Face Value: $41,000.00
Bond rate Payable Semi-Annually: 5%
Time Before redemption: 9 years 6 months
Redeemed at: par
Marked Quotation: 98.125
Round final answer to nearest cent.
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