Treasury bond issued by U.S. government has 7 years of maturity. Coupon rate is 6% paid annually, Face value is $1000 and yield to maturity (Kd) equals 5%. 1. What is the price of bond (VB)? Find the discount or premium amount? 2. Calculate the current yield and expected capital gain yield? 3. If the discount rate is expected to raise up to 8%. What is the bond current market price (VB)?

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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: