Financial instruments in the form of debentures are one of the sources of financing. Prior to issues relating to their valuation, let us look at closer to the parameters describing the debentures.

The nominal value is de facto the amount owed by the issuer of the debentures obligations to their holder. The issue price is the selling price of the debentures.

The relationship between the nominal value and the issue price of debentures allows us to distinguish two types:

• debentures (bonds) at a discount - in which the nominal value is higher than the issue price

• debentures (bonds) at a premium - the nominal value of which is lower than the issue price.

The market rate is called the market price of the debentures, which is expressed as a percentage of the nominal value.

Periodic cash benefits is called - coupon rates.

Nominal yield, the ratio of the value of the coupon face value, while the current yield - the ratio of the coupon in relation to the current market price of the debenture.

The yield to maturity, abbreviated YTM (ang. Yield To Maturity, or price to maturity) is the internal rate of return (IRR) determined on the basis of future revenue streams.

Clean and dirty price of a debenture can best be compared to the net and gross:

• pure debenture price is a price, a market without accrued interest, and so the net price

• dirty price of debenture, in turn, is the market price of the debenture plus the accumulated interest - the price of the gross

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