Before attempting to make an investment in any asset, you will need to learn the way it can be assigned a value to determine its worthiness. Else, you may end up paying a price far higher and suffer. Though there are different models, we attempted to make it simple enough so that for any given class of security, supported by your assumptions, you can determine the value. A decision taken after determining the value (to you) based on your own personal assumptions is more likely to be a better one.
- What is the value of the bond that I am holding?
- What is the value per share of the stock of the company I am holding?
- What is the book value per share of the company whose stock I am holding?
- What is the yield to maturity of my bond?
- Is this a worthy investment (NPV)?
- How is this investment in comparison to other (Annualized NPV)?
- What is IRR of this investment?