correctly match each curve on the graph to it’s corresponding issuing company. (Hint: Each curve indicates the path that each bond’s price, or value, is expected to follow.)
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:
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Bond yields and prices over time
|
Issuing Company
|
Annual Coupon Rate
|
|---|---|
| Johnson Incorporated | 6% |
| Smith, LLC | 12% |
| Irwin Corporation | 9% |
| Curve A | (Johnson Incorporated, Smith, LLC ,Irwin Corporation) |
| Curve B | (Johnson Incoroporated, Smith LLC, Irwin Corporation) |
| Curve C | J(ohnson Incorporated,Smith LLC,Irwin Coroporation) |
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