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Bonds

A bond is a financial instrument that contains a fixed obligation to pay periodical interest payments. Watch this video to find out more.

Watch the video and then summarise what you have learned.

A bond is a financial instrument that contains a fixed obligation to pay periodical interest payments, as well as the final payment of the principal to the investors, being the purchasers of the bond.

02:15 Bond pricing formula

Bond Price = (frac{C}{(1 + i)}) + (frac{C}{(1 + i)^2}) + … + (frac{C}{(1 + i)^n}) + (frac{M}{(1 + i)^n})

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Fundamentals of Corporate Finance

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