WAL-MART

Wal-Mart



Wal-Mart

BOND VALUATION

Bond valuation is based on three factors. As an investor, it's worth familiarizing yourself with them:

Purchase price

Yield

Interest rate

If you buy a bond at face value, or par, when it is issued and hold it until it matures, you will earn interest at the stated, or coupon rate. For example, if you buy a 20-year $1,000 bond paying 8%, you will earn $80 a year for 20 years. The yield or return on investment will also be 8%. And you will receive your $1,000 back when the bond matures in year 20 (Palmiter, 2002).

Secondary Bonds

You can also buy and ...