A $1,000 bond, redeemable at par, with annual coupons at i(1)=10%/a is purchases for $1,134.20. If the write-down in the book value is $9.26 in the first year, what is the write-down in the 8th year? Calculate by hand, not using excel or financial calculator.
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:
Calculate by hand, not using excel or financial calculator.
Step by step
Solved in 2 steps
