A $700,000, 20-year, 8% bond issue was sold to yield 10%. Interest was payable annually. Actuarial information for 20 periods follows: 8% 10% Future value of $1 4.66096 6.72750 Present value of $1 0.21455 .14864 Future value of an annuity of $1 45.76196 57.27500 Present value of an annuity of $1 9.81815 8.51356 Required: Compute the amount of cash that was received when the bonds were issued. When required, round your answer to the nearest dollar. $fill in the blank 1
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:
A $700,000, 20-year, 8% bond issue was sold to yield 10%. Interest was payable annually. Actuarial information for 20 periods follows:
| 8% | 10% | |
| Future value of $1 | 4.66096 | 6.72750 |
| Present value of $1 | 0.21455 | .14864 |
| Future value of an annuity of $1 | 45.76196 | 57.27500 |
| Present value of an annuity of $1 | 9.81815 | 8.51356 |
Required:
Compute the amount of cash that was received when the bonds were issued. When required, round your answer to the nearest dollar.
$fill in the blank 1
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