When you look at a bond issued by a company, the U.S. Treasury or a state or local authorities, you are going to observe a dollar amount prominently displayed. This is the value of this bond. Institutions issue bonds for a specified time period known as the maturity. Par value is the sum that the bond issuer must pay to retire, or pay off the bond once it matures. However, bonds are securities that are negotiable. As investors purchase and sell them, bond worth at any given time could be substantially different than the stated par value.
Determine the par value, also referred to as the face value, of this bond. Most municipal and corporate bonds have par values of $1,000 or $5,000. Treasury bonds may have. If you do not possess the bond certificate in your possession, then ask your agent for the info. Agents offer listings for account holders.
Get a price quote for the bond. Bond quotes aren’t listed in dollar figures. You will notice a percentage list. If a bond is currently selling for more than its par value, or selling”at a premium,” the quotation will be greater than 100.0. In the event the bond is currently selling for less than par, or”at a reduction,” the quotation will likely be less than 100.0.
Compute the bond worth by multiplying the percentage price quote from the bond’s par value. By way of example, if a bond is quoted at 110.0 and has a par value of $1,000, the bond value is $1,100.