 |
Definition of 'Bond Valuation'
A technique for determining the fair value of a particular bond. Bond valuation includes calculating the present value of the bond's future interest payments, also known as its cash flow, and the bond's value upon maturity, also known as its face value or par value. Because a bond's par value and interest payments are fixed, an investor uses bond valuation to determine what rate of return is required for an investment in a particular bond to be worthwhile.
|
 |
Investopedia explains 'Bond Valuation'
Bond valuation is only one of the factors investors consider in determining whether to invest in a particular bond. Other important considerations are: the issuing company's creditworthiness, which determines whether a bond is investment-grade or junk; the bond's price appreciation potential, as determined by the issuing company's growth prospects; and prevailing market interest rates and whether they are projected to go up or down in the future.
|
-
Don't be fooled by the name - junk bonds may be for you if you know how to analyze them.
Read More »
-
They may not be sexy, but bonds do have a place in every balanced portfolio. Find out why.
Read More »
-
Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
Read More »
-
-
If you want a diversified portfolio and steady cash flow, check out this fixed-income strategy.
Read More »
-
They may not be sexy, but bonds offer undeniable benefits to investors.
Read More »
|
|
