![]() ![]() In the example above, it is relatively straightforward to find the value of a bond on a coupon payment date with the PV function. To get positive dollars, we use a negative sign before the PV function to get final result of $973.79 Between coupon payment dates The arguments provided to PV are as follows: ![]() The PV function is configured as follows: =-PV(C6/C8,C7*C8,C5/C8*C4,C4) In this example we use the PV function to calculate the present value of the 6 equal payments plus the $1000 repayment that occurs when the bond reaches maturity. The value of an asset is the present value of its cash flows. Finally, the required rate of return (discount rate) is assumed to be 8%. However, because interest is paid semiannually in two equal payments, there will be 6 coupon payments of $35 each. The coupon rate is 7% so the bond will pay 7% of the $1,000 face value in interest every year, or $70. In the example shown, we have a 3-year bond with a face value of $1,000. ![]()
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