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Demonstrate bond valuations using Excel. Demonstrate bond yield calculations using Excel. The following examples illustrate how Microsoft Excel can be used to calculate common bond problems.
Demonstrate bond valuations using Excel. Demonstrate bond yield calculations using Excel. The following examples illustrate how Microsoft Excel can be used to calculate common bond problems.
The BondValuation.xls spreadsheet is created to value the price of a bond if the bond is sold in the market before the maturity date. The most important factor affecting a bond price is the interest rate. In rising interest rates, bond price will drop while in declining interest rates, bond price will rise.
ECN 3321 Bond price calculation practice questions Calculate the price of a bond with these characteristics. In each case, assume the coupon rate is 0.06, coupon payments are made every six months (twice per year), and the par value (maturity payment) of the bond is 1,000. 1. years to maturity = 5.0; market interest rate = 0.03.
Looking for the bond valuation formula? Download our free Excel template with three ready-made methods to determine the theoretical value of a bond.
We begin by showing how the techniques we developed in Chapters 4 and 5 can be applied to bond valuation. From there, we go on to discuss bond features, and how bonds are bought and sold. One important thing we learn is that bond values depend, in large part, on interest rates.
Estimate the value of a bond. Calculate various measures of bond yield. Read bond and stock quotations. Value a preference stock. Calculate the value of a stock using the dividend discount model and the P/E ratio approach. Show the relationship between E/P ratio, expected return, and growth.
