Blue Co. wants to buy a bond of ABC which has a maturity of 5 years. This bond has a par value of P3,000 and pays P300 annual coupon. The yield to maturity of these bonds is determined to be 15%. What is the total value of the bond after a year? (No rounding- off of present value factors, final answer to be round-up to 2 decimal places) *

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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: