An Omani Government zero-coupon bond with a par value of $5,000 matures in 10 years. At what price would this bond provide a yield to maturity that matches the current market rate of 5 percent? *What happens to the price of this bond if interest rates fall to 4 percent? Given the above changes in the price of the bond and the interest rate, calculate the bond price elasticity.

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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: