Definition of Redeem

Redeem is the act of an organization repurchasing a bond at or before maturity.

Brief Explanation of Redeem

The organization has the right to redeem the text at any time, although the earlier the payoff happens, the higher the top quality usually is. Redemption is created at the face value of the text unless it happens before maturity. In that situation, the text is purchased back at a quality to complete lost interest. It provides a reason for companies to do this as hardly ever as possible. It is also the act of the providing organization repurchasing shares or common resources. In the situation of common resources, the repurchase is created at net resource value per share. Stocks may be used in cash or by proration. A bond is purchased at a discount if its payoff value surpasses its sticker price. It is purchased at a quality if its sticker price surpasses its payoff value. Redemption value is the price at which the providing organization may choose to repurchase a security before its maturity date.