The Saleemi Corporation's $1000 bonds pay 7 percent interest annually and have 14 years until maturity. You can purchase the bond for $1,095. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 4 percent? ___________________________________________________________________________a. The yield to maturity on the Saleemi bond is ____ %.
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:
The Saleemi Corporation's $1000 bonds pay 7 percent interest annually and have 14 years until maturity. You can purchase the bond for $1,095.
a. What is the yield to maturity on this bond?
b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 4 percent?
___________________________________________________________________________a. The yield to maturity on the Saleemi bond is ____ %. (Round to two decimal places.)
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