You bought a GMI bond for $1,000 that has a coupon rate of 7.75 percent. If you were to sell this bond several years before maturity when the interest rate on comparable new issues was 9.5 percent, you would probably get a. $1,000. b. more than $1,000. c. less than $1,000. d. Not enough information is given to answer the question.
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:
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
