Calculating the present value of future coupon payments, along with the present value of the principal payment, is a good way to determine the value of a bond.

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Quizplus · Accepted Answer

This is because the present value of future cash flows (coupon payments and principal payment) is what determines the value of a bond. By discounting these future cash flows back to their present value using an appropriate discount rate, we can arrive at the present value of the bond.

Calculating the Present Value of Future Coupon Payments, Along with the Present