Chapter 6: Interest Rates and Bond Valuation

This page explains how interest rates are determined and how they reflect inflation, risk, and the interaction between borrowers and lenders in financial markets. It also introduces the structure and legal features of bonds, including coupon rates, bond indentures, risk premiums, and credit ratings that influence the cost of debt financing. Finally, the webpage demonstrates how bonds are valued by discounting their future cash flows and explains how required returns, time to maturity, and yield to maturity affect bond prices.