How to calculate Yield to Maturity in Excel
While I was doing my Finance 540, I took note of some useful pieces of information. The content in this post is originally from Investopedia. I welcome all the discussion for educational purposes. Yield to maturity is used to: Calculate the return in holding a bond Calculate cost of debt in corporate finance. How to Price a Bond The formula to price a traditional bond is: PV = Payment / (1+r) 1 + Payment / (1+r) 2 + ... + Payment + Principle / (1+r) n + where: PV = price of the bond (present) Payment = coupon payment, which is the coupon rate * face value ÷ number of payments per year r = required rate of return, which is required rate of return ÷ number of payments per year Principal = par value/face value of the bond N = number of years until maturity Calculate Yield to Maturity I don't have financial calculator when I did Finance 540. My Casio Fx500-Ms cannot compute the YTM as the financial calculator does. Therefore ...