REDEMPTION VALUE Meaning and
Definition
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Redemption value refers to the amount of money that an investor will receive upon the maturity or redemption of a financial instrument, such as a bond, debenture, or mutual fund. It represents the face value or par value of the investment, which is typically the amount that the issuer has promised to repay to the investor at the end of the investment period.
The redemption value may also include any accrued interest or dividends that have been earned by the investor up until the redemption date. This ensures that investors receive the full return on their investment, including any income generated by the financial instrument during the holding period.
The redemption value is an important consideration for investors when evaluating the potential returns of an investment. It helps to determine the overall profitability and yield of the instrument, as it represents the final amount that the investor will receive upon investment maturity or redemption. Investors may compare the redemption value with the purchase price or initial investment amount to assess the overall gain or loss.
Additionally, the redemption value is used by issuers to determine the financial obligations towards investors and to plan for future repayment. It serves as a benchmark for measuring the issuer's ability to meet its obligations and fulfill the terms of the financial instrument.
Overall, redemption value is a pivotal concept in financial markets, highlighting the final payout that investors will receive upon the maturity or redemption of their investment, and facilitating decision-making by both investors and issuers.
Common Misspellings for REDEMPTION VALUE
- eedemption value
- dedemption value
- fedemption value
- tedemption value
- 5edemption value
- 4edemption value
- rwdemption value
- rsdemption value
- rddemption value
- rrdemption value
- r4demption value
- r3demption value
- resemption value
- rexemption value
- recemption value
- refemption value
- reremption value
- reeemption value
- redwmption value
- redsmption value
Etymology of REDEMPTION VALUE
The word "redemption" comes from the Latin word "redemptio", which is derived from the verb "redimere". "Redimere" combines "re-" (meaning again) and "emere" (meaning to buy). Therefore, "redemption" originally referred to the act of buying back or repurchasing.
The word "value" comes from the Latin word "valere", meaning to be strong, be worth, or have power. Over time, it evolved to mean the worth or importance of something.
When combined, "redemption value" refers to the worth or amount for which something can be redeemed or repurchased. In finance, it often refers to the amount that can be obtained by redeeming stocks, bonds, or other investments.
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