The third of the primary principles of finance is known as valuation. This principle brings together the two other principles that were studied earlier: the time value of money and risk and return.
In your initial post, identify and recommend at least 1 credible Web site that an investor can visit to find the current market value of stocks and bonds being traded, and address at least 3 of the following:
- What is the concept of valuation, and how does it incorporate the time value of money and the risk of return principles?
- What is the bond, and what are the variables that are required to calculate the current market were present value of a bond?
- What are the 2 cash flows that are generally associated with bonds, and why is the present value of these cash flows less than the future value of these cash flows?
- Discuss the conditions where a bond would trade at par, a discount, and at a premium.
- Describe the various methods of estimating the value of common stock and their weaknesses.
- Discuss the primary differences between preferred and common stock?
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