One straightforward way to calculate the value of a bond is to estimate the bond’s yield given the investment’s conditions, such as price, coupon rate, and time to maturity. In Excel, you can calculate a bond’s yield, perhaps not surprisingly, by using the YIELD function. The YIELD function provides a simplified look at bonds.
- [Voiceover] One straightforward way to calculate…the value of a bond…is to estimate the bond yield…given the investment's conditions.…Those conditions could include price, coupon rate,…which is interest payments you receive…one or more times per year,…as well as time to maturity.…In Excel, you can calculate a bond's yield,…perhaps not surprisingly,…by using the yield function.…I will show you how to perform this type of calculation…using the yield with periodic interest 05-10 sample workbook…which you can find in the Chapter 5 folder…of your exercise files collection.…
You need a fair amount of information to calculate the yield…of a bond that pays out periodic interest.…The first thing you need to know…is the settlement date,…that's when you take possession of the bond.…Next is the maturity date,…and that is when the bond matures…and you receive your principal plus accumulated interest.…Next is the percent coupon,…and this is the amount of money that you receive…from the bond every time there is a coupon payment.…
Author
Curt Frye
Released
8/29/2016- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
Skill Level Intermediate
Duration
Views
-
Introduction
-
Welcome1m 5s
-
Disclaimer30s
-
-
1. Analyzing Loans, Payments, and Interest
-
2. Calculating Depreciation
-
3. Determining Values and Rates of Return
-
4. Calculating Bond Coupon Dates and Security Durations
-
5. Calculating Security Prices and Yields
-
6. Calculating Prices and Yields of Securities with Odd Periods
-
Conclusion
-
Additional resources1m 24s
-
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.
Share this video
Embed this video
Video: YIELD: Calculating the yield of a security that pays periodic interest