The bonds have a 4 percent coupon rate, payable semiannually, and a par value of $1,000. They mature in 10 years’ time. The yield to maturity is 12 percent, so the bonds now sell below par. Determine the current market value of the firm’s debt?

14. Match the following sentences to the most correct concept.

The process of accumulating interest in an investment over time to earn more interest is termed .

The present value of a future cash flow to determine its value today is known as the

.

The amount an investment is worth after one or more time periods is referred to as

_.

Interest earned on the principal and may be for a number of years may be called

_.

M

is referred to as .

The process of finding the present value of some future amount is called .