The payments received from a bond can be used to determine a bond's theoretical market price by taking the present value of the payments and adding them up.
What is a Present value?
Given a certain rate of return, present value (PV) is the current worth of a future financial asset or stream of cash flows. The discount rate determines how much future cash flows are discounted, and the higher the discount rate, the lower the current value of those future cash flows will be. The secret to accurately valuing future cash flows, whether they be earnings or debt obligations, is choosing the right discount rate.
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