公司理财第七版Chap006.pptVIP

* * Notice how we obtain the same value despite calculating the bond’s price two different ways. * When the interest rate rises, the present value of the payments to be received by the bondholder falls and bond prices fall. When the interest rate decreases, the present value of the payments to be received by the bondholder increases and bond prices rise. Interest rate risk – The risk in bond prices due to fluctuations in interest rates. * Current Yield – Annual coupon payments divided by bond price. Yield to Maturity – Interest rate for which the present value of the bond’s payments equals