The market price of a 10-year bond is 984$, its yield to maturity is 8% per year, and annual coupon payments are equal to 984$. The face value of the bond is $1000. Calculate the present value of the bond. Would you buy it? The answer is to be written in the reasons box. Round your answer to the nearest tenth. Optional: Provide calculation details in the reasons box.

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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: