Fixed-coupon bond price
Discount fixed coupon payments and the face-value repayment using your required yield.
How this works
Let F be face value, m coupon payments per year, n = whole years × m, i = annual nominal required yield/100/m, and C = F × annual coupon percentage/100/m. Price = C × [1 − (1+i)^(−n)]/i + F × (1+i)^(−n). At zero yield, price = C × n + F.
Example
The illustration may use different inputs from the reproducible default inputs listed below.
The defaults produce two $25 coupons per year, 20 total coupon periods and a 3% required yield per half-year. Discount those coupons and the $1,000 maturity payment. With all reset-default inputs, theoretical price on coupon date: $925.61.
- Face value ($)
- 1000
- Annual coupon rate (%)
- 5
- Annual nominal required yield (%)
- 6
- Whole years to maturity
- 10
- Coupons per year
- 2
- Theoretical price on coupon date
- $925.61
Scope and assumptions
This theoretical value assumes a coupon-date valuation with equally spaced coupons and repayment of face value at maturity. Accrued interest, default, call options, fees and taxes are excluded. The entered yield is your assumption; the result is not a live price or recommendation.
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