Suppose a firm issues a $10 million debenture maturing in 8 years and with an annual rate of 7%. Interest is paid annually at the end of the year.
How much will the firm have paid out in total as of year 8, when it pays the interest plus principal?
Suppose a firm issues a $10 million debenture maturing in 8 years and with an annual rate of 7%.
Interest is paid annually at the end of the year. How much will the firm have paid out in total as of year 8, when it pays the interest plus principal?
Principal Coupon Maturity (yrs.)
FV of coupon
Add debenture
Total Value