6. AP10,000, 8% bond pays dividends semi-annually and will be redeemed at 110% on April 29, 2027. It is bought on April 29, 2021 to yield 6% compoundedannually Find the price when it was bought

The purchase price of the bond will be the present value of the dividends and the redemption value.

Answered: 6. AP10,000, 8% bond pays dividends…

6. AP10,000, 8% bond pays dividends semi annualty and will be redeemed at 110% on April 29, 2027. Inis bought on April 29, 2021 to yield 6% compounded annually Find the price when it was bought

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter11: Notes, Bonds, And Leases

Section: Chapter Questions

Problem 5Q

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Concept explainers

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:

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6. AP10,000, 8% bond pays dividends semi-annually and will be redeemed at 110% on April 29, 2027. It is bought on April 29, 2021 to yield 6% compounded
annually Find the price when it was bought

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