Fixed Income Investments  Bond Valuation Basics
The fundamental principle of valuation is that the value is equal to the present value of its expected cash flows. The valuation process involves the following three steps:
1. Estimate the expected cash flows.
2. Determine the appropriate interest rate or interest rates that should be used to discount the cash flows.
3. Calculate the present value of the expected cash flows found in step one by using the interest rate or interest rates determined in step two.
Cash Flow
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RELATED TERMS

Present Value  PV
The current worth of a future sum of money or stream of cash ... 
Price to Free Cash Flow
A valuation metric that compares a company's market price to ... 
Relative Valuation Model
A business valuation method that compares a firm's value to that ... 
Economic Value Of Equity  EVE
A cash flow calculation that takes the present value of all asset ... 
Cash Flow
The net amount of cash and cashequivalents moving into and out ... 
NonOperating Cash Flows
Cash flows (inflows and outflows) that are not related to the ...
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