What is bond valuation?

Bond valuation is the sum total of the net present values of all coupons obtained over the bond holding period as well as the net present value of the par value (amount paid at time of purchasing the bond).

Bond valuation is a technique for determining the theoretical fair value of a particular bond. Bond valuation includes calculating the present value of the bond’s future interest payments, also known as its cash flow, and the bond’s value upon maturity, also known as its face value or par value.