Price of Bond Calculator

✖Face Value is the amount of money that the issuer of a bond agrees to repay the bondholder at the bond's maturity date.ⓘ Face Value [FV]			+10% -10%
✖Implied Discount Rate is the interest rate that equates the present value of the bond's future cash flows to its current market price.ⓘ Implied Discount Rate [IDR]			+10% -10%
✖Holding Period refers to the duration of time that an investor owns an asset from the moment it is purchased until it is sold.ⓘ Holding Period [HP]			+10% -10%

✖Price of Bond refers to the amount of money an investor pays to purchase the bond from the issuer or another investor in the secondary market.ⓘ Price of Bond [PB]

⎘ Copy

👎

Formula

✖

Price of Bond

Formula

`"PB" = "FV"*(1+"IDR")^"HP"`

Example

`"127.1314"="95"*(1+"0.06")^"5"`

Calculator

LaTeX

Reset

👍

Download Strategic Financial Management Formulas PDF PDF Image

Price of Bond Solution

STEP 0: Pre-Calculation Summary

Formula Used

Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period
PB = FV*(1+IDR)^HP
This formula uses 4 Variables

Variables Used

Price of Bond - Price of Bond refers to the amount of money an investor pays to purchase the bond from the issuer or another investor in the secondary market.
Face Value - Face Value is the amount of money that the issuer of a bond agrees to repay the bondholder at the bond's maturity date.
Implied Discount Rate - Implied Discount Rate is the interest rate that equates the present value of the bond's future cash flows to its current market price.
Holding Period - Holding Period refers to the duration of time that an investor owns an asset from the moment it is purchased until it is sold.

STEP 1: Convert Input(s) to Base Unit

Face Value: 95 --> No Conversion Required
Implied Discount Rate: 0.06 --> No Conversion Required
Holding Period: 5 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

PB = FV*(1+IDR)^HP --> 95*(1+0.06)^5

Evaluating ... ...

PB = 127.131429872

STEP 3: Convert Result to Output's Unit

127.131429872 --> No Conversion Required

FINAL ANSWER

127.131429872 ≈ 127.1314 <-- Price of Bond

(Calculation completed in 00.004 seconds)

You are here -

Home » Financial » Strategic Financial Management » Price of Bond

Credits

Created by Aashna

IGNOU (IGNOU), India

Aashna has created this Calculator and 100+ more calculators!

Verified by Surjojoti Som

Rashtreeya Vidyalaya College of Engineering (RVCE), Bangalore

Surjojoti Som has verified this Calculator and 10+ more calculators!

< 18 Strategic Financial Management Calculators

Money Market Discount Rate

Go Money Market Discount Rate = (Year/Days of Maturity)*(Face Value of Money Market Instrument-Present Value of Money Market Instrument)/Face Value of Money Market Instrument

Effective Convexity

Go Effective Convexity = (Price of Bond When Yield is Decreased+Price of Bond When Yield is Increased-(2*Initial Price of Bond))/((Change in Curve)^2*Initial Price of Bond)

Add on Rate

Go Add on Rate = ((Year/Days)*((Amount Paid at Maturity Including Interest)-Present Value of Money Market Instrument)/(Amount Paid at Maturity Including Interest))

Change in Price of Full Bond

Go Percentage Change in Price of Bond = (-Annual Modified Duration*Change in Yield)+(1/2*Annual Convexity*(Change in Yield)^2)

Value of Right using New Shares

Go Value of Right = Number of New Shares*(Market Price-Issue Price of New Share)/Total Number of All Shares

Single Month Mortality

Go Single Month Morality = Prepayment for a Month/(Beginning Mortgage Balance for Month-Scheduled Principal Repayment for Month)

Value of Right

Go Value of Right per Share = (Stock Price-Right Subscription Price)/Number of Rights to Buy a Share

Cost of Equity

Go Cost of Equity = ((Dividend in Next Period/Current Share Price)+(Dividend Growth Rate*0.01))*100

Unlevered Beta

Go Unlevered Beta = Levered Beta/(1+((1-Tax Rate)*(Debt/Equity)))

Levered Beta

Go Levered Beta = Unlevered Beta*(1+((1-Tax Rate)*(Debt/Equity)))

Price Value of Basis Point

Go Price Value of Basis Point = (Price of Bond When Yield is Decreased-Price of Bond When Yield is Increased)/2

Price of Bond

Go Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period

Approximate Macaulay Duration

Go Approximate Macaulay Duration = Approximate Modified Duration*(1+Rate of Interest)

Conversion Parity Price

Go Conversion Parity Price = Value of Convertible Security/Conversion Ratio

Share Exchange Ratio

Go Exchange Ratio = Offer Price for Target's Share/Acquirer's Share Price

Earnings Yield

Go Earnings Yield = (Earnings per Share/Market Price per Share)*100

Dividend Rate

Go Dividend Rate = (Dividend per Share/Current Share Price)*100

Earnings Yield using PE Ratio

Go Earnings Yield = (1/Price-Earnings (PE) Ratio)*100

Price of Bond Formula

Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period
PB = FV*(1+IDR)^HP

What is Price of Bond ?

Price of Bond is the amount of money an investor pays to purchase the bond from the issuer or another investor in the secondary market. The bond price can vary based on factors such as interest rates, credit quality of the issuer, and time to maturity. For instance, if the market interest rate is currently 4%, the bond will trade at a premium because its coupon rate is higher than the current market rate, making it more attractive to investors. Conversely, if the market interest rate is 6%, the bond will trade at a discount. In summary, the price of a bond is a key measure that reflects the present value of its future cash flows, influenced by market interest rates, credit quality, and time to maturity. Investors must make informed decisions about buying, holding, or selling bonds.

How to Calculate Price of Bond?

Price of Bond calculator uses Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period to calculate the Price of Bond, Price of Bond reflects the present value of the bond's future cash flows, which include periodic coupon payments and the repayment of the bond's face value at maturity. Price of Bond is denoted by PB symbol.

How to calculate Price of Bond using this online calculator? To use this online calculator for Price of Bond, enter Face Value (FV), Implied Discount Rate (IDR) & Holding Period (HP) and hit the calculate button. Here is how the Price of Bond calculation can be explained with given input values -> 127.1314 = 95*(1+0.06)^5.

FAQ

What is Price of Bond?

Price of Bond reflects the present value of the bond's future cash flows, which include periodic coupon payments and the repayment of the bond's face value at maturity and is represented as PB = FV*(1+IDR)^HP or Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period. Face Value is the amount of money that the issuer of a bond agrees to repay the bondholder at the bond's maturity date, Implied Discount Rate is the interest rate that equates the present value of the bond's future cash flows to its current market price & Holding Period refers to the duration of time that an investor owns an asset from the moment it is purchased until it is sold.

How to calculate Price of Bond?

Price of Bond reflects the present value of the bond's future cash flows, which include periodic coupon payments and the repayment of the bond's face value at maturity is calculated using Price of Bond = Face Value*(1+Implied Discount Rate)^Holding Period. To calculate Price of Bond, you need Face Value (FV), Implied Discount Rate (IDR) & Holding Period (HP). With our tool, you need to enter the respective value for Face Value, Implied Discount Rate & Holding Period and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

Home

FREE PDFs

🔍 Search