We have three condition solve one by one 3-year bond with 10% coupon rate and $1000 face value yield to maturity is 8%. Assuming annual coupon payment, calculate the price of the
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:
We have three condition solve one by one
- 3-year bond with 10% coupon rate and $1000 face value yield to maturity is 8%. Assuming annual coupon payment, calculate the price of the bond.
- 10-year bond with 12.5% coupon rate and $1000 face value yield to maturity is 14.5%.Assuming annual coupon payment, calculate the price of the bond.
- 5-year bond with a coupon rate of 4% has a face value of $1000. What is the annual interest payment?
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