Consider these long-term investment data: • The price of a 10-year $100 par zero coupon inflation-indexed bond is $84.53. • A real-estate property is expected to yield 2% per quarter (nominal) with a SD of the (effective) quarterly rate of 10%. Compute the annual rate on the real bond. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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:
Consider these long-term investment data:
• The price of a 10-year $100 par zero coupon inflation-indexed bond is $84.53.
• A real-estate property is expected to yield 2% per quarter (nominal) with a SD of the (effective) quarterly rate of 10%.
Compute the annual rate on the real bond. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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