Podalic, Inc., has 10% percent coupon bonds on the market with 14 years left to maturity. The bonds make semi-annual payments and have a par value of $1,000. If the bonds have a yield to maturity of 12 percent, what is the price? Select one: a.$895,94 b.$815.59 c.$796.31 d.$865.94
Podalic, Inc., has 10% percent coupon bonds on the market with 14 years left to maturity. The bonds make semi-annual payments and have a par value of $1,000. If the bonds have a yield to maturity of 12 percent, what is the price? Select one: a.$895,94 b.$815.59 c.$796.31 d.$865.94
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 8P
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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:
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