National Co. wants to construct a bond portfolio consisting of Bulldogs bonds which has a maturity of 10 years. The said portfolio will hold 4 Bulldogs bonds with a total par value of P8,000. These bonds pay 5% annual coupon. The appropriate discount rate is determined at 6%. What is the bond value of each bond after 5 years? Note: No rounding off present value factors. No rounding off until final answer. Format: XX.XX
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:
National Co. wants to construct a bond portfolio consisting of Bulldogs bonds which has a maturity of 10 years. The said portfolio will hold 4 Bulldogs bonds with a total par value of P8,000. These bonds pay 5% annual coupon. The appropriate discount rate is determined at 6%. What is the
Note: No rounding off
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