A company has issued some 6% bonds at par value of OMR 75, the shares can be redeemed at the end of 6 years. Investors now require a redemption yield of 16%. Find the present value of interest received on bond at the end of fourth year. ( consider three place after decimal in your calculation) a)OMR 41,40 b)OMR 58.188 c)OMR 16.788 d)OMR 43.15
A company has issued some 6% bonds at par value of OMR 75, the shares can be redeemed at the end of 6 years. Investors now require a redemption yield of 16%. Find the present value of interest received on bond at the end of fourth year. ( consider three place after decimal in your calculation) a)OMR 41,40 b)OMR 58.188 c)OMR 16.788 d)OMR 43.15
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:
Question
A company has issued some 6% bonds at par value of OMR 75, the shares can be redeemed at the end of 6 years. Investors now
require a redemption yield of 16%. Find the present value of interest received on bond at the end of fourth year. ( consider three
place after decimal in your calculation)
a)OMR 41,40
b)OMR 58.188
c)OMR 16.788
d)OMR 43.15
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