Excellent Berhad has bonds on the market with 14.5 years to maturity, a YTM of 5.3%, a par value of RM1,000 and a current price of RM1,045. The bonds make semiannual payments. What must the coupon rate be on these bonds
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:
Excellent Berhad has bonds on the market with 14.5 years to maturity, a YTM of 5.3%,
a par value of RM1,000 and a current price of RM1,045. The bonds make semiannual
payments. What must the coupon rate be on these bonds?
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