You are considering buying below corporate bonds for income generation: Tesla 4% per year semi-annual coupon matured in 5 years, with face value $1000 Rivian 4% per year semi-annual coupon matured in 3 years, with face value $1000 Both corporate bonds are traded at same yield to maturity 6% per year (compounding semi-annually), how much you need to pay for the bond that is LESS expensive?
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:
You are considering buying below corporate bonds for income generation:
- Tesla 4% per year semi-annual coupon matured in 5 years, with face value $1000
- Rivian 4% per year semi-annual coupon matured in 3 years, with face value $1000
Both corporate bonds are traded at same yield to maturity 6% per year (compounding semi-annually), how much you need to pay for the bond that is LESS expensive?
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