Formula for calculating bond value

    • [DOC File]Index of [finpko.ku.edu]

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      Value of bond = value of assets ( value of call (32) where “value of call” is the value of the call option on the firm’s assets. Using (12): Value of call = value of put + value of assets ( …

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    • [DOC File]BASICS OF BOND VALUATION

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      Bond Valuation. Value of a coupon bond: Bond Price = Remember—Most bonds pay semiannual then c must be the semiannual interest payment, YTM must be divided by 2 and n must be multiplied by 2. Biggest problem is determining the discount rate or required yield

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    • [DOC File]The major formulas for present value (these will reappear ...

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      The formula in the text gives the par yield as . To verify that this is correct we calculate the value of a bond that pays a coupon of 7.072% per year (that is 3.5365 every six months). The value is . verifying that 7.072% is the par yield. Problem 4.14.

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    • [DOC File]Bond Yields and Prices

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      From future value, we know how to bring forward today's cash flow with a given interest rate. For calculating the yield, we have the present value (the price of the bond) and the future value (the par price of the bond at maturity) and we solve for the interest rate. Consider the interest rate formula…

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    • [DOC File]Bond Features - University of Kentucky

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      Bond Pricing: PV(Bond) = PV (coupon payments ) + PV (final principal payment) Two ways to price a bond: Spot Rates are known: (1.1) on p.4 of Taggart. Cash flows at different dates from the same bond are discounted at different spot rates. You can obtain these spot rates from market quotes. You should be able to derive spot rates from coupon bonds

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    • [DOC File]Duke University

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      Bond price =Coupon (PVIFA r%,t) + Face value (PVIF r%,t) If a bond has five years to maturity, an $80 annual coupon, and a $1000 face value, its cash flows would look like this: Time 0 1 2 3 4 5. Coupons $80 $80 $80 $80 $80. Face Value $ 1000. How much is this bond worth? It depends on the level of current market interest rates.

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    • [DOC File]INFLATION, CASH FLOWS AND DISCOUNT RATES

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      Using the duration formula to estimate the change in value: Bond: (Value = CD: (Value = The difference in the change in value of the assets and liabilities for Bank B is $1,024.04 using the duration estimation model. The small difference in this estimate and the estimate found in part a above is due to the convexity of the two financial assets.

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    • [DOC File]Chapter Nine - NYU

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      If a $10,000 face-value discount bond maturing in one year is selling for $8,000, then its yield to maturity is. 10 percent. 20 percent. 25 percent. 40 percent. Question Status: Previous Edition. If a $10,000 face-value discount bond maturing in one year is selling for $9,000, then its yield to maturity is. 9 percent. 10 percent. 11 percent. 12 ...

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    • 3 Ways to Calculate Bond Value in Excel - wikiHow

      Because a bond's par value and interest payments are fixed, an investor uses bond valuation to determine what rate of return is required for an investment in a particular bond to be worthwhile. Present value of a bond. VB = INT(PVIFA Kd, n) + M(PVIF kd, n) ( one payment/yr. VB = INT(PVIFA Kd/2, 2n) + M(PVIF kd/2, 2n) ( semiannual

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