You are thinking about buying a 10-year bond that was issued 2 years ago. The coupon rate is 5% paid semi-annually. The company that issued the bond has not performed too well and you decide that you need a 5.79% annual rate of return in order to compensate you for the risk. What should you pay for one bond. Round to nearest $ and use $ symbol.
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:
You are thinking about buying a 10-year bond that was issued 2 years ago. The coupon rate is 5% paid semi-annually. The company that issued the bond has not performed too well and you decide that you need a 5.79% annual
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