3M

Definition

3M is the ticker symbol for 3M Company, a multinational conglomerate corporation. In finance, it can be used as an example of a publicly traded company's bonds and their valuation.

5 Must Know Facts For Your Next Test

1. 1. 3M bonds are rated by major credit rating agencies which affects their yield.
2. 2. The interest rate environment influences the market price of 3M bonds.
3. 3. Investors analyze 3M's financial health to assess bond risk.
4. 4. Yield to Maturity (YTM) is a crucial metric for valuing 3M bonds.
5. 5. Bond valuation models consider both the coupon payments and the principal repayment at maturity for 3M bonds.

Review Questions

• 1. How does the credit rating of 3M affect its bond yields?
• 2. What role does Yield to Maturity play in the valuation of 3M bonds?
• 3. Why is it important to evaluate the financial health of 3M when investing in its bonds?

Related terms

Coupon Rate: The annual interest payment made by the bond issuer relative to its face value.

Yield to Maturity (YTM): The total return anticipated on a bond if held until it matures, including all interest payments and capital gains or losses.

Credit Rating: An assessment of the creditworthiness of a borrower, impacting the interest rates they pay on issued debt instruments like bonds.