A 20-year, 8% semiannual coupon bond with a par value of $1,000 may be called in 5 years at a call price of $1,040. The bond sells for $1,100. (Assume that the bond has just been issued.)
Basic Input Data:
Years to maturity:		20
Periods per year:		2
Periods to maturity:		40
Coupon rate:		8%
Par value:		$1,000
Periodic payment:		$80
Current price		$1,100
Call price:		$1,040
Years till callable:		5
Periods till callable:		10

f. Now assume the date is 10/25/2014. Assume further that a 12%, 10-year bond was issued on 7/1/2014, pays interest semiannually (January 1 and July 1), and sells for $1,100. Use your spreadsheet to find the bond's Refer to this chapter's Tool Kit for information about how to use Excel's bond valuation functions. The model finds the price of a bond, but the procedures for finding the yield are similar. Begin by setting up the input data as shown below: Basic info: Settlement (today) Maturity Coupon rate Current price (% of par) Redemption (% of par value) Frequency (for semiannual) Basis (360 or 365 day year) Call date Call price Hint: Use the Yield function For dates, either refer to cells D122 and D123, or enter the date in To find the yield to call, use the YIELD function, but with the call price rather than par value as the redemption Yield to call You could also use Excel's "Price" function to find the value of a bond between interest payment dates