- This topic has 1 reply, 2 voices, and was last updated 8 years ago by
.
- Posts
Sir, there is a case i am confusing:
if a company issues debenture at $100 nominal value and in the market, share price is only $80 ( which is the actual amount the company receives from investors), so with the loss of $20, how the company would compensate for it? Would the company use retained earnings to compensate for the loss in market price?
Thank you so much Sir, God blesses you.
The market value is of no relevance to the company.
They receive and record the $100 at which they were issued at. The market value from them on will change, but this does not affect the company at all – it is the price at which debenture holders buy and sell the debentures from each other.
I do suggest that you watch my free lectures. The lectures are a complete free course for Paper F9 and cover everything needed to be able to pass the exam well.
- The topic ‘Market value of debentures’ is closed to new replies.