How to calculate par value of a bond?
Understand the Problem
The question is asking how to determine the par value of a bond, which typically involves understanding financial concepts related to bonds, their pricing, and valuation.
Answer
The par value of a bond is its face value.
The par value of a bond is the face value indicated on the bond certificate, typically $1,000 for corporate bonds.
Answer for screen readers
The par value of a bond is the face value indicated on the bond certificate, typically $1,000 for corporate bonds.
More Information
Par value is often used in the context of bonds to define the amount to be repaid at maturity. It is separate from the bond's market price, which can fluctuate.
Tips
A common mistake is to confuse par value with the current market value. They differ as market value depends on demand and other market conditions.
Sources
- What Is the Par Value of Bonds? - Kiplinger - kiplinger.com
- Par Value - Definition, Example, Importance - corporatefinanceinstitute.com
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