Calculating Prices of Bonds with Semi-Annual Coupon Payments (Using Excel)

In this video you'll learn how to determine the price of a bond that makes semi-annual coupon payments (as most corporate bonds in the US do). Additionally, you'll see how you can easily calculate the price of a bond in Excel using =pv() and =price() function.
Students will particularly find this video useful in understanding parts of Chapter 8 (Interest Rates and Bond Valuation) of Corporate Finance (13th Edition) by Ross, Westerfield, Jaffe and Jordan.

[@musicaddicted1999]

Just know that i will pass my course in senior year because of you. Thank you so much

[@faithfultrue9605]

Thanks sir for the knowledge shared!

[@heatmikepark]

For bonds paying semi annually, can we consider the discount rate as 10% and coupon rate as 80 while considering the maturity as 7 years? will that make any difference while calculating.

[@pujadevi8444]

hey there, not understanding why YTM = discount rate. in the previous video, we saw bond pricing dependent on market interest rate. is the annuity formula here saying that the bond offers 8% APR/coupon but the interest rate/market rate is actually 10%? in which case, why is holding this particular bond held til maturity going to equal the same value as buying a new bond from the market today?

[@professorikram]

Yes, this is saying that coupon (APR) is 8% but market rate (ie the rate bond investors are requiring) is 10%. That is why the value of this bond is less than its face value.
I’m not sure I fully understand what you mean by “why is holding this bond till maturity equal to the same value as buying a new bond”. New bonds will likely be issued with a 10% coupon, which is what investors require. So it will have a value of $1,000. By investing in our bond that is only offering 8% coupon , investors will make some money in coupon payments and the remainder in the form of increase in bond price over time.

[@Invest-qh3jh]

Thanks

[@sebattiani]

Why do u change YTM? I gues u cant