A 10-year bond pays 8% on a face value of $1,000. If similar bonds are currently yielding 10%, what is the market value of the bond? Use annual analysis. a. Less than $900 b. More than $900 and less than $1100 c. More than $1100 d. Not enough information to tell
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:
A 10-year bond pays 8% on a face value of $1,000. If similar
bonds are currently yielding 10%, what is the market value of
the bond? Use annual analysis.
a. Less than $900
b. More than $900 and less than $1100
c. More than $1100
d. Not enough information to tell
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