If company recently issues new debt then would its MV be equal to its balance sheet value?
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MV of debt
4y ago#1Not necessarily.
On the Statement of Financial Position (it is not called the Balance Sheet any more), the debt appears at its nominal value (which is $100 per bond unless told otherwise).
The company may issue the debt for $100 in which case the MV initially will be $100. However they may issue the debt at a discount and if (for example) it was issued for $90 then the initial market value will be $90 (even though on the SOFP it will appear at its nominal value of $100).
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