Bond Valuation and Yield to Maturity (YTM) Calculator

Yield to Maturity (YTM) is a critical financial measure that calculates the total expected return on a bond if held to its maturity date. It factors in the bond's current market price, face value, the annual coupon rate as a percentage, and the time to maturity, considering the frequency of coupon payments. YTM is expressed as an annual rate and offers investors a comprehensive view of a bond's potential return, facilitating comparisons across different bonds.

Yield to Maturity (%)

P = ∑ t = 1 n C ( 1 + r ) t + F V ( 1 + r ) n P = sum_{t=1}^{n} rac{C}{(1+r)^t} + rac{FV}{(1+r)^n}
P = Current bond price ($)
C = Coupon payment per period ($)
FV = Face value of the bond ($)
r = Total number of coupon periods
n = Yield to maturity (solving for this)

Yield to Maturity (Estimated) (%)

YTM = ( FV × r m + ( FV - P ) n ) ( FV + P 2 ) × m × 100 YTM = rac{C + rac{(FV - P)}{n}}{ rac{(FV + P)}{2}} imes m imes 100
P = Current Bond Trading Price ($)
C = Annual coupon payment ( FVxr/m)
FV = Bond Face Value/Par Value ($)
r = Annual Coupon Rate (%)
m = Number of coupon payments per year, determined by the payment frequency

Current Yield (%)

Current Yield = (Annual Coupon Payment / Current Bond Price) * 100
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