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AFMMarket Value of Irredeemable Debentures

Ssaeid13y ago
How do you calculate Market Value of the following Irredeemable Debentures:
$200,000 @12% with market yield of 10%.
Answer must be $240,000
John MoffatJohn MoffatTutor13y ago#1
Market value = Interest / Required return

Interest p.a. = 12% x 200,000 = 24,000 p.a.

Market value = 24,000 / 10% = 240,000
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